Obviously this is a far cry from the price rises we were experiencing in Stoke-on-Trent throughout 2014. At one point (January 2014 to be exact) property values were rising by 3.6% a year. All the same, even with the tempering of the Stoke-on-Trent property values in 2015, property values are still higher. This is good news for local homeowners who had been affected by the downturn after 2007 and still find themselves in negative equity.
However, the thing that concerns me is that the average number of properties changing hands (ie selling) has dropped substantially over the last 12 months in the City. In April 2014, 196 properties sold in Stoke-on-Trent but in April 2015, that figure dropped to 169. I have been in the Stoke-on-Trent property market for quite a while now and the one thing I have noticed over the last few years has been the subtle change in the traditional seasonality of the Stoke-on-Trent property market. It has been particularly noticeable this year in that the normal post-Easter flood of properties coming onto the market was not seen.
This has made an imbalance between supply and demand. Fewer houses are coming onto the market so there is simply not as much choice. Combine this with the population of Stoke-on-Trent ever increasing, this will generally strengthen house price growth for the foreseeable future.
So what does all this mean for Stoke-on-Trent landlords, or those considering dipping their toe into the buy to let market for the first time? For many people, buy-to-let looks a good investment, providing landlords with a decent income at a time of low interest rates and stock market unpredictability.
However, if you are thinking of investing in bricks and mortar in Stoke-on-Trent, it is important to do things correctly. As an investment to provide you with income, for those with enough savings to raise a big deposit, buy-to-let looks particularly good, especially compared to low savings rates and stock market yo-yo's. I must also remind readers that landlords have two opportunities to make money from property: rental income and capital gains - that is, the market value of the property increasing.
Savvy landlords with decent deposits can fix their mortgages at just over 3% for five years, making many deals stack up. Nevertheless, low rates cannot stay low forever, because one day they must rise! You need to know your property can stand that test. I saw some Stoke-on-Trent landlords struggling in the mid-noughties, when interest rates rose from 3.5% in July 2003 to 5.75% in July 2007. That might not sound a lot, but that was the difference of making a £100 a month profit in 2003 to having to make up a shortfall in the mortgage payments of £100 per month in 2007.
It is true many landlords were thrown a life raft when the base rate dropped to 0.5% in March 2009. Whilst interest rates have remained there since, they will certainly rise again in the future. However, even with the potential for costs to rise, demand for decent rental properties remains high as there are ever more tenants in the market, driving up demand and thus rents. The British love of bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Stoke-on-Trent property market.
If you are planning on investing in the Stoke-on-Trent or Newcastle under Lyme property market, or just want to know more things to consider for a successful buy to let investment then please just call us or pop in for an informal chat or for more interesting articles about the Stoke on Trent property market there is our property blog http://stokeontrentproperty.blogspot.co.uk/