The Land Registry have just released their latest set of figures for the Melton Mowbray Property market. It makes interesting reading, as average property values in Melton Mowbray rose by 0.5% in May. This leaves average property values 4.1% higher than 12 months ago, meaning the annual rate of growth in the town fell to its lowest level since March 2014.
Obviously this is a far cry from the price rises we were experiencing in Melton Mowbray throughout 2014. At one point (October 2014 to be exact) property values were rising by 7.7% a year. All the same, even with the tempering of the Melton Mowbray property values in 2015, property values are still higher.
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 town. In April 2014, 43 properties sold in Melton Mowbray but in April 2015, that figure dropped to 18. 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, with less houses coming onto the market there is simply not as much choice of properties to buy. With the population of Melton Mowbray ever increasing, this will generally strengthen house price growth for the foreseeable future.
If you are thinking of investing in bricks and mortar in Melton Mowbray, 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. Landlords have two opportunities to make money from property, income from rent and property value increases.
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 and you need to know your property can stand that test. I saw some Melton Mowbray 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.
Its 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 rise again in the future. However, demand for decent rental properties remains high as there are ever more tenants in the market, driving up demand and rents. The British love of bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Melton Mowbray property market.
If you are planning on investing in the Melton Mowbray property market, or just want to know more, things to consider for a successful buy to let investment, one source of information is the Melton Mowbray Property Blog www.meltonmowbrayproperty.com.