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The Future of the Crediton Buy-to-Let Market in 2024

The UK’s property market is facing a significant challenge as the availability of homes for rent has plummeted to its lowest level in five years, exacerbating the difficulties tenants face in finding affordable accommodation.

This alarming trend was highlighted in a recent analysis, which revealed that in 2023, only 261,542 private rental homes were available per month in the UK, marking a steep decline from the 379,459 monthly average of rental homes available in 2020—a drop of 31%, underscoring a worrying trend that has been developing over recent years.

This scarcity of rental properties is occurring against a backdrop of increasing mortgage costs for landlords, which, in turn, places additional pressure on the rental market.

Higher interest rates and rental prices

Higher interest rates, coupled with a high demand for rental properties, have led to significant increases in rental prices (rising from £1,343 pcm in 2020 to £1,739 pcm in 2023 – an increase of 29%), making it increasingly difficult for tenants to find affordable housing.

The combination of reduced availability and escalating costs creates a challenging environment for renters, finding fewer properties available at higher rents.

The difficulties tenants face are further compounded by the financial pressures on mortgaged landlords, who have seen the affordability of mortgages decline sharply. This has led to a re-evaluation of their business models by some landlords, with a resultant divestment from rental property portfolios in some cases. The impact of this on the market has been profound, with average buy-to-let mortgage rates experiencing a sharp increase, further exacerbating the challenges landlords and tenants face.

The shifting dynamics of the UK rental market

The UK rental market’s dynamics have shifted significantly, with rents rising by 29% as available rental stock dwindled by 31% since 2020.

The Bank of England has highlighted the potential repercussions of this situation in its financial stability report in the summer of 2023, noting that many landlords are likely to seek a raise in rents to offset their higher costs as they come off their fixed-rate mortgages, thereby exacerbating the difficulties for tenants, particularly those with lower incomes and lower savings.

The supply crunch in the rental market has led to increased competition among prospective tenants, with many properties being let almost immediately to quality tenants. This competition drives rents upwards, making it even more challenging for new tenants to find affordable housing. Additionally, the reluctance of existing tenants to move, fearing higher rents elsewhere, contributes to the shortage of available properties, as fewer tenancies are ending and coming back onto the market.

This situation is particularly acute at the lower end of the price spectrum, where the availability of homes to rent for less than £1,000 a month has significantly declined, making it even more challenging for those on tighter budgets to find suitable housing.

740,027 sub £1,000 pcm UK rental properties came onto the market in 2020; this dropped to 464,774 in 2023, a drop of 37.2%.

In contrast, the market for premium properties (over £2,000 pcm) has seen an increase in availability of 52.6% (from 203,502 coming on the rental market in 2020 to 310,516 in 2023), highlighting the stark disparities within the rental market.

How is this an opportunity for Crediton landlords?

The current property market could present a notable opportunity for Crediton landlords. To do that, we must look at the background statistics and numbers for the Crediton area.

These are the average monthly stock levels of private rental homes in the Crediton area (EX17):

  • 2019 – 61 rental properties per month in the Crediton area
  • 2020 – 52 rental properties per month in the Crediton area
  • 2021 – 36 rental properties per month in the Crediton area
  • 2022 – 36 rental properties per month in the Crediton area
  • 2023 – 37 rental properties per month in the Crediton area

The average rent in the Crediton area in 2020 was £782 per calendar month; in 2023, it was £909 per calendar month.

Crediton rents have risen by 36%, as available rental stock dwindled by 16% since 2020.

The escalation of rental prices signifies a robust income stream for Crediton property investors. This is particularly advantageous in a market where high demand ensures properties are let swiftly, often to quality tenants willing to pay a premium for scarce housing options. For Crediton landlords, this means not only an immediate increase in rental income but also the prospect of sustained long-term profitability as market dynamics push Crediton rents even higher.

Furthermore, the challenging mortgage landscape, with rising buy-to-let mortgage rates with high percentage mortgages, has meant more landlords leaving the market, thereby reducing competition and potentially increasing the demand for existing Crediton rental properties even further.

This unique set of circumstances presents an opportune moment for current and prospective landlords to capitalise on their Crediton property investments, leveraging the tight supply to secure higher rental yields and enhance the attractiveness of their property portfolios.

What about Crediton tenants?

As the UK grapples with this challenging rental market landscape, a multifaceted approach is needed to address the underlying issues. This includes considering the impact of mortgage costs on landlords, the affordability of rents for tenants, and the overall availability of rental properties.

The Government need to build more homes. Yet excluding land, the building costs in the UK start from £163 per square foot. A 3-bed semi is a minimum of 1000 ft.². The most conservative estimate shows that Britain is approximately 2 million households short now, meaning the bill for those additional 2 million homes would be £326bn (excluding the land). For context, the NHS costs £181bn a year!

The Government currently spends £17.35bn a year on housing, which would need to increase to £49bn a year for the next ten years to pay for those 2 million homes. To give you an idea of what that would cost taxpayers…

Income tax would need to rise by 5.81 pence in the pound to pay for those additional 2 million homes!

That is the equivalent of an extra £991 per year for every taxpayer for the next ten years – not a vote winner! Yet without significant Government intervention and strategic planning, the difficulties tenants face in finding affordable homes will likely persist, with potential long-term implications for the housing market and the broader economy.

Meanwhile, British landlords must pick up the pieces and continue to buy properties. Unfortunately, it is the nature of the game that with limited supply and increasing demand, prices (i.e. rents) go up. My heart goes out to Crediton tenants having to pay these increased rents, but the market is the market, and we cannot control that. It has been proved beyond doubt, in Scotland and around the world, that rent controls do more harm than good, so I hope that the Government grasps the nettle and finally does something to sort our housing issues once and for all in the medium to long term.

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The UK Property Market in 2024: A Robust Start with Implications for Crediton

As experienced estate and letting agents in Crediton, we’ve been closely monitoring the trends in the UK property market. As of January 11th, 2024, the market has shown a solid start, a trend worth exploring, especially in how it might mirror or differ from the local market in Crediton.

In the first 11 days of 2024, the UK property market recorded 22,402 homes sold subject to contract (stc). This figure represents a significant increase compared to the first 11 days in 2023, where only 15,735 properties were sold stc.

This is an impressive 42.37% increase in the number of UK home sales year-to-date.

For those of you who like your property stats, the average price of the property sold stc in the first 11 days of 2023 was £337,678 with an average of £321/sq.ft. In 2024, the average sale agreed price was almost identical at £337,972, yet the average pound per square foot was slightly higher at £326/sq.ft.

Such a surge in the property market demands a deeper analysis to understand the underlying factors and what they might mean for local markets, such as Crediton.

Key Drivers of the UK Property Market Surge

  • Lowering Mortgage Rates: One of the primary catalysts for the increased activity in the property market is the reduction in mortgage rates. This development has made purchasing property affordable for a more significant population segment, boosting home sales.
  • Rising Wages: The rise in average wages has also played a critical role. With more disposable income, individuals are more inclined to invest in property, which is a secure and lucrative asset.
  • Low Unemployment Rates: The strong job market and low unemployment rates have instilled confidence in people, encouraging them to make significant life decisions such as buying a home.
  • Additional Factors: There are other factors at play as well, including demographic shifts, changes in housing preferences post-pandemic, and government policies that may have incentivised property purchases.

Crediton’s Property Market: A Comparative Analysis

When we turn our attention to Crediton, it’s important to recognise that local markets can behave differently from national trends. (Crediton being EX17).

Before diving deeper into this, I wanted to see if the types of properties selling in the first two weeks of the year in the Crediton area in 2024 differed from those in 2023.

The average price of the property that was agreed on a sale (i.e. sold stc) in the first 11 days of 2023 in Crediton was £315,833 with an average of £385/sq.ft.

In 2024, the average sale agreed price was £279,999, yet the sq.ft. average was lower at £295/sq.ft.

You will note a vast difference in the average price paid and the £/sq.ft. figures. That doesn’t mean house prices have crashed. It just means the mix of properties sold in Crediton in the first 11 days of January is much different in 2024 than in 2023. This will affect the averages tremendously because we are dealing will a relatively small number of house sales over a short period compared to the regional and national picture. This will settle down as time and more sales pass by in the coming months.

Local Factors Influencing Crediton’s Market

The performance of Crediton’s property market could be influenced by local economic conditions, the specific demographic profile of the area, and even regional policy decisions. For instance, developments in local employment opportunities, infrastructure projects, or changes in the local landscape compared to other parts of the UK could significantly affect market dynamics. Do share your thoughts on that and reply with a comment.

Future Outlook and Advice for Homeowners and Landlords in Crediton

Looking ahead, the property market in 2024 is on a promising trajectory. However, understanding the nuances of the local market is crucial for homeowners and landlords in Crediton. It’s not just about national trends but how they interact with local and regional factors.

We encourage Crediton property owners and prospective buyers to seek tailored advice. Understanding the current market position of your property and how to navigate the 2024 market landscape can be pivotal in making informed decisions.

While the UK property market has seen a robust start in 2024, it’s essential to fully delve into local market conditions to grasp the opportunities and challenges. For those in Crediton, I am here to provide expert insights and guidance tailored to our unique market conditions. Whether you are a homeowner looking to sell or a landlord seeking to expand or liquidate your portfolio, understanding the specifics of Crediton’s property market is critical to making strategic decisions.

Remember, the Crediton property market is dynamic, and what applies on a national level might not mirror precisely at the local level. As we move through 2024, staying informed and adapting to the changing market will be crucial for success in any property transaction.

To understand your position in the Crediton property market, or if you have any queries about potential property investments, please feel free to contact us. Our expertise and local market knowledge of Crediton are at your disposal to help you navigate these exciting times in our local property market.

Please share your thoughts on any aspect of this with a comment.

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Mortgage War Will Save Crediton Homeowners £2,766 a Year

In a recent financial turn, Crediton residents are experiencing a wave of relief as mortgage rates across the UK take a surprising dip. This reduction, led by major lenders, signals a potential opportunity for the Crediton housing market, directly affecting homeowners, landlords and first-time buyers in the town.

Let’s delve into what this means for the local market, weighing up both the opportunities and the need for realistic expectations.

The Welcome Decline in Mortgage Rates

Leading the charge, Halifax announced on the 2nd of January a significant 0.83% cut in its re-mortgage deals, a move promptly followed by other financial institutions.

These cuts are not just numbers; they translate to substantial monthly savings for homeowners. For instance, on a £200,000 mortgage, this reduction could mean savings of £138 per month. As these lower rates become the new norm, they herald a brighter outlook for those looking to re-mortgage or enter the housing market.

For Crediton homeowners eyeing the market, this is a particularly opportune moment. The lowered rates could make transitioning to a new home more feasible, easing the financial burden often accompanying such a move.

Additionally, previously daunted by high entry costs, first-time buyers might find the market more welcoming, spurring a rejuvenation of property transactions in the area.

For example,

  • The average terraced house in Crediton in the last 12 months sold for £224,292.
  • The mortgage on a typical 85% loan-to-value mortgage would be £190,648 (meaning a 15% deposit of £33,644).
  • If a Crediton first-time buyer bought their house last summer, when the average five-year fixed rate was 6.3%, the mortgage payments would be £1,125.73 per month (for the next five years).
  • At the time of writing this article, Halifax were offering an 85% loan-to-value, five-year fixed rate at 4.57%, yet HSBC were offering something even better, a 4.44%, 85% loan-to-value mortgage on a five-year fixed rate.
  • That means their mortgage payments would only be £895.18 per month.
  • The average Crediton first-time buyer purchasing a terraced house is, therefore, saving £230.55 per month or £2,766.59 over the year because of the fall in mortgage rates over the last six months.

As you can see, the drop in mortgage interest rates makes quite a difference and will be a welcome saving to most Crediton household budgets.

Economic Indications and Market Predictions

The trend of falling rates is expected to continue, fuelled by competitive market dynamics and a general anticipation of further interest rate cuts by the Bank of England. Financial experts are betting on a substantial drop in Bank of England base interest rates throughout 2024, with the money markets believing base rates will slowly reduce in small steps from the current 15-year peak of 5.25% down to 3.75% by the year’s end, making mortgages more affordable and possibly boosting the property market’s health.

However, amidst the optimism, Crediton homeowners must adopt a tempered view. While the cuts are substantial, the rates are still relatively high compared to the historically low rates in previous years. Homeowners looking to sell should be particularly mindful of this. Setting realistic pricing, reflective of the current economic conditions and buyer capabilities, will be crucial to successful transactions.

Advice for Crediton Homeowners and Buyers

For those considering a move or entering the Crediton property market, it’s an opportune time to reassess your options. Seeking financial advice and comparing the market can ensure that you benefit from the best available rates. The market is fluid, and staying informed will be vital to making financially sound and beneficial decisions in the long term.

Advice for Crediton Landlords

In Crediton, falling interest rates herald a prosperous time for landlords. As financing costs decline, the burden of mortgages and loans diminishes, enhancing profitability. Concurrently, rents are escalating at a rate outpacing inflation, often in double digits, amplifying income streams significantly. This dual boon means landlords can enjoy reduced operational costs while benefiting from increasing rental revenues, bolstering their investment returns in the vibrant Crediton property market. This positive shift in financial dynamics offers a promising outlook for existing and prospective landlords in the area.

Final Words on this Mortgage War

The recent drop in mortgage rates brings a fresh wave of optimism to Crediton’s property market. It opens doors for homeowners looking to move and incentivises first-time buyers. However, a balanced, well-informed approach will be essential, with economic indicators suggesting varied outcomes. Whether you’re planning to buy, sell or re-mortgage, understanding the market and setting realistic expectations will be crucial to making the most of this financial shift.

Crediton’s property landscape is evolving, and with careful consideration and strategic planning, residents can navigate this change effectively and advantageously. If you are a Crediton homeowner, landlord or first-time buyer and you have any questions about buying or selling in Crediton in 2024, please call us on 01363 777999.

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Navigating the Crediton Property Market: The Art of Pricing Properties Right

As we stand at the threshold of 2024, facing economic uncertainties and a shifting housing landscape, the significance of correct pricing in Crediton’s property market has never been more pronounced.

This comprehensive guide delves into the crucial aspects of property pricing and its profound impact on the property market transaction process.

Crediton’s Property Market: A Brief Overview

Crediton’s property market presents a unique blend of historical charm and modern appeal. The Crediton property market caters to diverse preferences, from classic village properties and 19th-century homes to contemporary modern homes, from terraced homes, apartments, flats, maisonettes, and detached and semi-detached homes. However, this diversity brings with it the challenge of accurately valuing properties. Various factors, including economic shifts, transport links, schools, demographic changes, and national housing trends, have influenced the local Crediton market. Understanding these elements is essential for setting a price that reflects the property’s worth and market conditions.

The Risks of Overpricing Your Crediton Home

One of the most common pitfalls in property sales is overpricing. This mistake often originates for two reasons.

The first is an emotional attachment to the property or the owner’s misinterpretation of the market, so the owner’s hopes are over inflated for the local property market (remember, buyers haven’t got the emotional connection you have for your home).

The second is when estate agents overvalue properties to attract homeowner business; it poses significant risks and consequences for the homeowners. This practice, often driven by the desire to secure a listing, can lead to a misleading perception of the property’s actual market value.

Overpriced Crediton Properties Tend to Remain on the Market for More Extended Periods

When a property is overpriced, it leads to what’s often termed as ‘listing fatigue.’ This stagnation can create a negative perception among potential buyers, who may assume there are unspoken issues with the property.

This stagnation not only diminishes the property’s appeal but can also necessitate subsequent price reductions, which may cast doubt on the property’s condition or desirability in the eyes of potential buyers. Moreover, a property lingering unsold due to overvaluation can disrupt the homeowner’s plans, whether purchasing a new home or relocating.

I recognise for the homeowner, an overinflated price tag initially seems appealing. Yet, it ultimately results in a prolonged period on the market, as the property fails to attract buyers at this unrealistic level and sometimes you have to drop your asking price below the market value six/nine months later to get it sold.

All these scenarios underscore the importance of choosing a Crediton estate agent who provides honest, market-reflective valuations from the outset, ensuring a smoother, more efficient sale process and safeguarding the homeowner’s best interests.

The Downside of Under-pricing Your Crediton Home

Conversely, under-pricing a property, although potentially expediting a sale, can result in substantial financial loss for the seller. Setting a price too low in a market where maximising returns is paramount can mean significantly under-realising your Crediton property’s actual market value. This scenario underscores the importance of expert valuation that considers all aspects of the property, including its potential in the current market.

Striking the Right Balance for Your Crediton Home

Accurate pricing is a delicate art that balances understanding a property’s intrinsic value and aligning it with market trends. It involves thoroughly analysing local Crediton market conditions, comparative property studies, and awareness of broader economic factors.

As a seasoned estate agent in Crediton, I bring a comprehensive understanding and in-depth knowledge of local markets to assist homeowners in accurately pricing their properties. This approach is not just about facilitating quicker sales; it’s about ensuring that properties are sold at their rightful value.

There is no harm in ‘trying the market’ at a slightly higher price in the initial stages of marketing. Yet, if you are going to try a slightly higher price, it is so important to have this monitored on a weekly basis in the first four to six weeks of the property being on the market and making any necessary changes to the asking price around that time.

There is such a thing as a Goldilocks price reduction. It shouldn’t be too little or too much, just right, so it gives a strategic price reduction.

Crediton House Price Reduction Stats

In a competitive property market, a strategic price reduction can reignite interest in a property. When used judiciously, this tactic attracts more potential buyers, sparking renewed attention and leading to a quicker sale. By adjusting the price to align with market trends and buyer expectations more closely, sellers can effectively boost the appeal and visibility of their property.

The rule of thumb is that if you try a slightly higher price in the initial stages of marketing, do so, at most, for a few weeks/one month, then reduce it. But how much should you reduce it by?

As always, that comes down to your property and its standing in the market.

However, I wanted to share with you the level of price reductions in the Crediton area (EX17) over the last six years.

In 2018, an average of 217 properties were for sale in the Crediton area. Estate agents reduced, on average, 16 properties per month; thus, 7.2% of Crediton homes were reduced in price every month.

In 2019, an average of 238 properties were for sale in the Crediton area. Estate agents reduced, on average, 25 properties per month; thus, 10.1% of Crediton homes were reduced in price every month.

In 2020, there were an average of 198 properties for sale in the Crediton area during the year. Estate agents reduced, on average, 15 properties per month; thus, 7.4% of Crediton homes were reduced in price every month.

In 2021, an average of 115 properties were for sale in the Crediton area. Estate agents reduced, on average, 9 properties per month; thus, 8.1% of Crediton homes were reduced in price every month.

In 2022, there were an average of 117 properties for sale in the Crediton area. Estate agents reduced, on average, 7 properties per month; thus, 6.0% of Crediton homes were reduced in price every month.

In 2023 (to the end of November), there have been an average of 195 properties for sale in the Crediton area during the year. Estate agents reduced, on average, 26 properties per month; thus, 12.6% of Crediton homes were reduced in price every month.

As you can see, there has been a substantial increase in properties on the market and thus price reductions in the Crediton area the last year.

The average reduction of a Crediton home in the last three months has been 5.7%

Looking Ahead to the 2024 Crediton Property Market

As we advance into 2024, the Crediton property market, like many others, is navigating through a period marked by economic uncertainties and evolving buyer preferences. In this environment, realistic pricing is not merely a tactic for selling; it becomes a critical tool for differentiation in a competitive marketplace. Crediton properties priced in line with current market realities are more likely to attract serious buyers and foster successful home moves.

My final thoughts are that homeowners need to understand and master the art of property pricing, which is crucial in today’s challenging and complex real estate market, especially in a diverse and evolving area like Crediton.

As an estate agent committed to delivering the best outcomes for my clients, my role goes beyond facilitating property transactions; it involves guiding and educating Crediton homeowners to make informed decisions in this dynamic market. Regardless of which estate agent you choose, remember that realistic and accurate pricing is the cornerstone of success in the current property landscape.

If you’re thinking of moving in the next few months, and you want to know the true place of your Crediton property in the Crediton property market as a whole, or you are presently on the market with another Crediton agent and you would like an honest opinion of where you stand, please do not hesitate to contact me on 01363 777999 or [email protected]

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The Future of Crediton House Prices

Helmores House prices in the next 5 years

Navigating the Changing Market

In the ever-changing landscape of the Crediton property market, predicting future house price trends can be akin to navigating a labyrinth. The past two years have witnessed unprecedented upheaval, primarily due to fluctuating interest rates that significantly impacted household finances, reminiscent of the challenges not faced since 2008.

The average rates for fixed-rate mortgages have dramatically risen, notably from late 2021. This hike in the Bank of England base rates has led to a substantial increase in monthly mortgage payments, consequently affecting people’s ability to purchase new homes.

Signs of Stabilisation

However, the Crediton property market has begun to show signs of stabilisation.

Recently, there’s been a pause in the rise of the Bank’s base interest rate, maintaining the same rate for two consecutive months after a consistent increase since late 2021. This stability is mirrored in the mortgage sector, with lenders offering more competitive rates.

Market Predictions: A Tricky Business

As an agent who likes to analyse the Crediton property market, I have found it difficult to predict the market trends.

The initial forecasts by many pundits at the start of the year saw them predicting a significant decline in property prices. Savills were expecting a drop of 10% in 2023, whilst Jones Lang LaSalle predicted a 6% drop. Yet, looking at the press in the last few weeks, these opinions have been adjusted, with recent data indicating a less drastic reduction than anticipated. This trend suggests a potential levelling out of house prices soon.

Crediton House Prices: A Closer Look

Current Trends

Crediton house prices are 0.32% lower than December 2022.

The average home in Mid Devon was £318,762 in December, and the last set of figures for August showed that it had slightly decreased to £317,739.

Overall, these statistics look very good considering the dark clouds at the start of the year, yet four months of statistics are still left before the year ends. In measuring house prices, the Land Registry is often seen as the definitive measure of local property market house prices. The issue is the time lag in the data.

Predictive Insights

However, the Land Registry house price index can be predicted with very high certainty. The key to this forward-looking perspective lies in the sale agreed (i.e., when a property becomes sold stc) pound per square foot figures.

A meticulous examination of both the £/sq.ft at sale agreed and the Land Registry Index data over the last five years by Denton House Research reveals a robust 90.5% positive relationship between the national £/sq.ft at sale agreed and the eventual national Land Registry Index four or five months later.

For homebuyers and sellers, this insight is groundbreaking. It means that the pulse of the property market can be gauged in advance, allowing for strategic decisions well before the official figures roll in, giving them a substantial edge in the property market.

Therefore, whilst UK house prices are currently 0.236% higher from December 2022 to August 2023, the £/sq.ft data suggests they will end the year between 0.5% and 1.3% lower.

Looking Ahead: 2024 and Beyond

Predictions for 2024 and 2025

What about 2024 and 2025 in Crediton? To judge that, we must look at the national picture first.

The first half of 2024 will see continued treading water of house prices (when some months there will be a slight increase and other months where they will dip slightly). By the end of December 2024, the net effect will show national house prices around 2% to 3% lower.

Then, in 2025, there should be a slow and steady increase in average national house prices between 2% and 3%, with more normal rises of 4% to 6% a year by 2027/8.

Market Confidence Indicators

Another key indicator of market confidence is the surveyor sentiment, which, although still cautious, shows signs of improvement despite the lower number of property transactions predicted for the current year compared to pre-pandemic levels.

This resilience is partly attributed to homeowners managing the increased financial strain of rising interest rates better than expected, with minimal cases of forced sales or repossessions. Financial institutions have played a role, offering flexible mortgage options and extended terms.

Another factor contributing to this resilience is the financial buffer created by savings accumulated during the pandemic. These savings have allowed many to continue their purchase plans or meet increased mortgage payments. A robust employment market and rising wages have also helped mitigate the mortgage debt burden.

The landscape for first-time buyers also appears promising, with their numbers potentially recovering more rapidly than home-movers. This trend is partly fuelled by financial support from the Bank of Mum and Dad, a contrast to home-movers who might be constrained by higher rates and larger mortgages.

The Rental Market Outlook

Challenges Ahead

The rental market, however, faces continued challenges.

Some doom-mongers have pointed their finger at the buy-to-let market as signs of an impending house price crash as buy-to-let landlords are reportedly ‘dumping’ their rental portfolios on the property market.

The number of landlords selling their portfolios has indeed increased. On average, 96,700 rentals are sold by UK buy-to-let landlords yearly; the tax year ending April 2023 that had risen to 153,000 UK rental properties. Many have picked up on this in the press as an indication of a massive landlord exodus. However, it must be remembered that there are 4.6 million private rental properties in the UK, so these disposals only represent 3.32% of all the rental properties. Also, whilst fewer landlords are expanding their portfolio, buy-to-let purchases (looking at the stamp duty statistics) show that they are only 22% lower than the long-term average. Interestingly, 144,000 properties were bought for buy-to-let in the tax year ending April 2023. So overall, it’s not the exodus the newspapers are saying!

Therefore, with the number of buy-to-let properties available to rent remaining roughly the same as last year but demand increasing, that has created upward pressure on rents. This situation is exacerbated by landlords’ increased mortgage costs, resulting in the need for even higher rents (as I have discussed many times in my recent articles).

Crediton House Prices in 2028

An Educated Guess

So, where will Crediton house prices be in 2028?

Subject to no further black swan events getting out of control (e.g., energy prices, Ukraine, Taiwan or the Middle East, etc.), Crediton house prices will be between 13% and 16% higher by the middle of 2028.

This is an educated guess, yet the Crediton property market is navigating through a period of adjustment marked by gradual stabilisation and cautious optimism. While challenges remain, particularly in the rental sector, the overall outlook for the Crediton property market suggests a slow but steady recovery, with variations in different parts of the town and a shift in buyer behaviour. As the property market adapts, potential buyers and investors must remain attuned to these evolving dynamics to make informed decisions.

Your Thoughts Matter

Join the Discussion

As we look ahead to the future of the Crediton property market, I’d like to hear your thoughts. Do you agree or disagree with my perspectives? Please share your views in the comments—every opinion is valuable and contributes to our understanding. Also, don’t forget to check out my previous articles on Crediton property market growth for more insights. Your engagement and feedback are what make these discussions genuinely insightful.

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The Resurgence of Crediton’s Semi-Detached Houses: A 594% Price Surge in 28 Years

In the realm of British suburban living, the semi-detached house has often been the subject of caricature, symbolizing safe yet uninspiring domesticity. Popular culture has played a significant role in this, with representations in hit TV shows and movies like the Dursleys from Harry Potter, BBC’s Outnumbered, Birds of a Feather, and the ever-awkward Alan Partridge. However, recent property trends in Crediton are painting a different picture, showcasing the semi-detached house’s resilience and appeal.

A Historical Perspective of the British Semi-Detached House

Semi-detached houses have been a staple of the British housing landscape for over 150 years, dating back to the Victorian and Edwardian eras. Interestingly, these houses were often referred to as ‘villas’ in the late 19th and early 20th centuries, highlighting their longstanding appeal. While many Europeans prefer apartment living, the British have consistently been drawn to the suburban comfort of semi-detached houses, striking a balance between proximity to neighbors and maintaining a sense of independence.

Crediton’s Semi-Detached Houses: A Smart Investment

Semi-Detached Houses Performing Well Against Other Property Types

In a comparison of property types over the past 28 years, Crediton’s semi-detached houses have experienced an astounding average price increase of 594%. This is significantly higher than the 281% increase for detached properties and the 123% rise for flats and apartments. Even terraced houses, with a 394% increase, have not kept pace with the semi-detached market.

The Financial Journey of Crediton’s Semi-Detached Houses

In 1995, a semi-detached house in Crediton was valued at approximately £54,100. Today, the average price stands at £375,300. This remarkable growth underscores the semi-detached house’s appeal to both homebuyers and investors, providing a tangible example of its solid performance in the property market.

The Enduring Appeal of Semi-Detached Houses

Semi-detached houses offer many of the benefits of detached properties but at a more affordable price point. Their design, dating back to the Victorian and Edwardian eras, provides spacious reception rooms, a cozy bedroom atmosphere, and the luxury of both front and back gardens. These features contribute to their continued popularity among British families, offering a blend of tradition, functionality, and charm.

Crediton’s Semi-Detached Market Today

A Diverse Range of Properties

Crediton boasts a variety of semi-detached properties, from charming older homes to modern builds suited to contemporary tastes. This diversity ensures that there is something to appeal to a wide range of prospective buyers.

Market Dynamics

Since 1995, 529 semi-detached homes have been sold in Crediton, accounting for 21.94% of all home sales in the area. On average, these homes take 70 days to sell in the current property market. Interestingly, detached homes in Crediton take 39 days to sell, while terraced houses take 72 days, and flats/apartments also take 39 days.

Conclusion: A Trend Worth Watching

The significant value increase of Crediton’s semi-detached houses over the past 28 years highlights their enduring appeal and solid investment potential. These homes offer a unique blend of affordability, functionality, and suburban charm, ensuring their popularity continues in the present day.

Whether you are a homeowner, a prospective buyer, or an investor in the Crediton property market, the semi-detached house represents a key segment of the market that cannot be overlooked. With a rich history and a proven track record of performance, these homes stand as a testament to the enduring dream of suburban independence.

Stay tuned to my blog for more insights and updates on the Crediton property market, and feel free to follow me and our agency on social media for additional thoughts and articles!

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Crediton’s Housing Market: An in-depth analysis of where Crediton people are moving

The consensus among economists and the wider public is clear: the remarkable ascent of Crediton’s property prices over the previous twelve years has reached its peak.

Major national publications splash headlines filled with pessimism about the UK housing market, citing issues such as buyer affordability caused by challenges with average salary growth not keeping up with inflation, higher interest rates also hitting buyer affordability, and the hangover of the pandemic making recruiting people hard work. However, these gloomy projections don’t seem to resonate with the fact that Crediton’s property market activity in the past year closely mirrors that of 2017/18/19.

This divergence might hint at the age-old notion:

‘bad news sells newspapers’.

To provide a clearer picture, let’s delve deeper into Crediton’s property market nuances, focusing on the demographics of movers and their motivations.

During the past year most of the property sales in Crediton were terraced properties, selling for an average price of £234,520. Detached properties sold for an average of £487,790, with semi-detached properties fetching £286,450.

A closer look at Crediton’s homeowner sector in the last 12 months of housing data reveals the following…

  • 94 Crediton households moved within the same ownership sector, implying they sold their home to purchase another.
  • 22 Crediton households ended and exited home ownership (i.e., moved in with family, moved to a care home or sadly passed away).
  • 24 Crediton households shifted from owning to private renting.
  • 2 Crediton households moved from home ownership to social housing (i.e., Council Housing or Housing Association).
  • 50 Crediton households shifted from private renting to homeownership.
  • 51 new Crediton homeowner households emerged, transitioning from residing with family or friends to buying their first property without experiencing the private rental sector.

Despite the relentless doom and gloom portrayed in the media about the property market, it’s heartening to witness a robust influx of Crediton first-time buyers securing their own homes.

Remarkably, 51 of these newcomers have moved from family or friends into homeownership, showcasing the enduring spirit of people wanting to buy their home. Additionally, 50 households have transitioned from the private rented sector, demonstrating a genuine aspiration among tenants to achieve homeownership.

This trend underscores the resilience and adaptability of aspiring homeowners amidst challenging times.

But what does this data spell out for Crediton’s buy-to-let landlords?

On the surface, with 50 households moving from private rentals to homeownership and 24 moving the other way, there seems to be a slight contraction in the private sector.

Yet, what I don’t mention is the number of new rental households. I do not have the Crediton statistics for those yet, but we can look to the national statistics.

Whilst the number of British landlords, according to capital gains tax receipts, selling up has increased by around 45% in the last year compared to pre-pandemic levels, the number of landlords buying buy-to-let is only 19% down.

There are new rental properties being created, whilst at lower than previous years, it is still growing nationally by 177,000 households a year.

So where are the opportunities for Crediton landlords?

A golden opportunity for Crediton’s property investors lies in the 22 properties that went up for sale last year due to owners passing.

Often, these homes, maintained over several decades by older owners, feature high-capital improvements like double-glazing or central heating. However, they might lack contemporary aesthetics, having outdated decor or out-of-style fixtures from the 1980s.

Such properties often come at lower prices because many buyers overlook their potential due to dated appearances. A smart investment in renovations could lead to handsome profits on resale.

It’s imperative to put things in perspective.

Regardless of global events – whether it’s post Brexit, post Pandemic, potential political shifts in the US or China, interest rates or stock market dynamics – Crediton’s property market remains robust in the mid to long-term framework.

Even as we witness minor value corrections in the upcoming 12 to 18 months, history has shown that property prices bounce back, often with greater momentum.

This underscores the timeless advice to those venturing into the property market, be it first-time buyers, landlords, or homeowners: property is a marathon, not a sprint.

Commitment to the long haul invariably yields rewards, a philosophy that can be applied universally don’t you think?

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Crediton Property Insights: Ignoring the Doom Monger Headlines

Navigating the property landscape, particularly in a town like Crediton, requires more than just a reactive approach to the daily newspaper and social media headlines.

As homeowners and potential investors are continuously bombarded with alarming whispers of plummeting house prices, coupled with rising interest rates and the heartache of negative equity, there’s a tangible atmosphere of anxiety and trepidation. Yet, the truth we must all embrace is this:

No one can predict the property market with pinpoint accuracy, not even the experts.

Every press release from the Halifax, Nationwide or Land Registry with the merest hint of a downturn or hiccup in the property market becomes headline fodder, often stoking fears and uncertainty. Why do the newspapers and clickbait doom mongers post that?

Because ‘bad news’ sells newspapers!

With interest rates on an upward trajectory, both prospective and current Crediton homeowners are grappling with pressing questions …

Will the house price decline continue? Is negative equity on the horizon? What of interest rates? Let us dive in on the current state of play.

Crediton house prices are only 1.6% lower than their peak of November 2022.

(£320,876 November 2022 to £315,564 June 2023 – the most up-to-date data from the Land Registry).

Interesting when compared with a national drop of 1.9% over the same time frame, with most areas seeing house prices rise in the last two months!

Historically, property prices have exhibited a rhythmic dance of peaks and troughs. A review of housing market trends over decades would reveal this inherent cyclical nature. House price declines are only a prelude to eventual rebounds. This pattern has been the underpinning of the property market for generations.

What of negative equity?

If Crediton house prices drop by 10%, a small percentage of homeowners (2.83% of all homeowners that have bought in the last two years) will be in negative equity.

Yet, that is only a problem if they decide to sell the property, and as we all know, homeownership is a long-term thing, and most of those who would have negative equity will probably be on five-year fixed low-rate mortgages.

But what if Crediton house prices dropped from the peak in November 2022 by the same percentage (20.6%) as they did in the global financial crash in 2008/9?

If that were the case, Crediton house prices would just return to the Land Registry house price levels achieved in May 2021 (£255,416) – and nobody was complaining about those! (Although the number of people in negative equity would increase slightly).

As Crediton homeowners face uncertainty regarding potential house price drops, it is crucial to recognise the various factors that support the housing market’s resilience. While economic conditions can fluctuate, history has shown that housing values tend to appreciate over the long term.

Crediton homeowners can also take comfort in the differences between the 2023 market and the 2008 housing bubble, including stronger equity positions and a more regulated lending environment.

So what does the future hold for Crediton homeowners?

For homeowners in Crediton, it’s crucial to understand the broader context. Global economic dynamics, national policies, regional developments, and local demand-supply dynamics all play pivotal roles in determining property prices.

As such, while short-term market shifts are inevitable, they don’t necessarily define the long-term trajectory of property values.

Moreover, property should often be viewed as a long-term investment.

While the temptation to make quick decisions based on current trends is strong, it’s vital to consider the bigger picture. Remember that property isn’t just an asset; for many, it’s a home, a place of memories, and a cornerstone of family life.

The mortgage interest rates of 1% to 1.5%, that we saw up to 18 months ago, are not going to return. Yet looking at 5-year swap rates, the money markets are predicting (with billions and billions of pounds of their own money at stake) that UK interest rates will come down significantly over the next 5 years from their current levels of around early 6%.

There is a saying in property – “Marry the house, and date the interest rate”.

It simply means you are committing to a long-term relationship with the house you love. Yet you can dump the interest rate when you re-mortgage. The idea is that when you find the house you love, you buy it, with the anticipation that you will be able to refinance later when interest rates drop.

Diving into the archives of property history, one witnesses a tale as old as time: a fluctuating market characterised by peaks and troughs. Like the ever-rolling waves of the sea, property prices rise, fall, and rise again.

Such is the cyclical nature of housing markets worldwide, and Crediton is no exception.

For the residents and homeowners of Crediton, understanding the broader tapestry of property dynamics is paramount. Consider these vital elements:

• Global and Local Economic Factors: Crediton’s property market, though unique, doesn’t exist in a vacuum. International economic shifts, national fiscal policies, regional developments, and even local events play decisive roles in shaping property prices. A short-term dip, as mentioned above, does not foretell a long-term decline or house prices crashes as seen in 2008.

• The Long Game: Traditionally, owning property is a marathon, not a sprint. Quick, impulsive decisions, driven by panic or greed, rarely bear fruit. Instead, a more measured, patient approach, considering the property’s long-term potential, is often more rewarding.

• Crediton’s Rich Tapestry: With its historical charm, coupled with an array of property types ranging from vintage homes to contemporary modern brand-new homes, Crediton offers resilience against sweeping market downturns. This diversity provides both stability and opportunity.

• Infrastructure & Growth: Crediton’s ongoing development and infrastructural projects often lead to a long-term appreciation of property values, countering short-term market fluctuations.

• Rental Prospects: A potential silver lining during market downturns is the rental market. Crediton’s strategic location, history, and vibrant community make it a perennial attraction for renters. For Crediton homeowners, this can translate to a steady income stream even if the sales market looks less favourable.

• Historic Resilience: A glance at Crediton’s past reveals a property market that has not only weathered numerous economic challenges but often emerged stronger and more robust. This resilience speaks volumes about its inherent potential.

In weaving through the property labyrinth, homeowners and investors in Crediton must cultivate a panoramic view. While it’s easy to get swayed by the market’s immediate waves, one must remember the vast seas and ocean beyond. The short-lived troughs are merely precursors to the next crest.

To truly succeed in Crediton’s property domain, it’s less about reacting to today’s noise and more about tuning into the timeless melodies of history, patience, and informed foresight.

If you would like a chat about where you sit in the Crediton property market, do not hesitate to give me a call on 01363 777999 or drop me a message on social media or email [email protected] – I’d love to hear from you.

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Crediton’s Property Market Pulse:Deciphering the Latter Half of 2023

Stepping into the world of the property market is akin to stepping into a rhythm. The beats of buying and selling, supply and demand form the underlying tempo.

Crediton, a town rich in history and character, is no exception. As we venture into the last quarter of 2023, it’s crucial to understand the current property market’s tempo and how it might influence your property decisions.

A Refresher on Market Dynamics

For the uninitiated or those who need a memory jog, Crediton’s property dynamics hinge primarily on the proportion of properties tagged as “Sold STC” and “Under Offer” with the total properties on the market, e.g. if there are 40 properties sold stc and 100 properties available/for sale, then 40 as a percentage of 100 is 40%.

This isn’t just a number game; it’s a barometer of market sentiment:

  • Extreme Buyers’ Market (0%-20%)
  • Buyers’ Market (21%-29%)
  • Balanced Market (30%-40%)
  • Sellers’ Market (41%-49%)
  • Hot Sellers’ Market (50%-59%)
  • Extreme Sellers’ Market (60%+)

The weight of these brackets can’t be overstated. They directly impact everything from listing prices to negotiation leverage.

Current Crediton Property Market Snapshot

To fathom where Crediton’s property market stands now, let’s incorporate our most recent findings:

The statistics have been sourced from the website ‘The Advisory’, which has calculated the market state for many years. I wanted to share them from the summer of 2018 to today so you can see for yourself.

What are the Statistics for the Crediton area for the Last 5 Years?

DatePercentage
Jun-1850%
Jun-1944%
Jun-2030%
Jun-2178%
Jun-2274%
Dec-2256%
Mar-2353%
May-2356%
Jun-2355%
Jul-2355%
Aug-2351%
Sep-2343%

In June 2023, we were at 55% in the Crediton area. In July, that remained at 55%; in August, it dropped to 51%, and as we enter September, it has dropped to 43%.

Based on the patterns exhibited in this table, it’s evident that the Crediton area has veered from a hot sellers’ market in the spring and early summer of 2023, not unexpectedly into a sellers’ market as we go into the autumn.

Implications & Considerations for Crediton’s Homeowners

This new data prompts us to take stock and ponder:

For Sellers: Are we transitioning into a market where you must be more strategic, flexible, or patient? Should you brace yourself for longer marketing periods? Realistic pricing is even more vital than ever. Remember, in 2022, 92.9% of Crediton properties that came onto the market had a sale agreed on them. As explained in last week’s article, year to date, that is running at 63.5%.

For Buyers: What challenges and opportunities lie ahead? Some properties will still have bidding wars, yet will you have the luxury of choice and time with others?

Broader Economic Picture: External influences, from inflation and interest rate repercussions to global economic trends, all cast shadows on the local property market. How might these larger forces be influencing Crediton’s property scene?

The Local Pulse: Infrastructure projects, school ratings, transport links, and even Crediton’s cultural events can make certain areas more desirable. Are there upcoming local developments that could be game-changers?

Delving Deeper: Strategies and Tactics

Given the market’s temperature, here are more granular insights:

Sellers: Innovative marketing—like specialised social media campaigns, virtual/video tours or interactive property listings—could make a difference in a cooling market. Emphasising unique property attributes, whether a south-facing garden or proximity to popular schools, can elevate a listing.

Buyers: Again, there is more than one market. If you are looking for the type of property everyone is looking for, the competition will heat up. Therefore, it is worth having mortgage pre-approvals in place and also being open to widening your search radius. Alternatively, buyers can wield more power in negotiations in a less competitive market, from price to property extras.

Dual Role of Buyer-Seller: A pivotal 81% of sellers also wear the buyer’s hat. This duality presents its challenges and advantages, where a victory on one side might mean a compromise on the other.

Final Thoughts on the Crediton Property Market

As we leave 2023 going into 2024, with its twists and turns, the Crediton property market offers both challenges and opportunities for Crediton’s home buyers and sellers. Understanding the market nuances is paramount if you are a Crediton first-time buyer, a seasoned property buy-to-let investor, or someone looking to relocate.

Stay informed, stay adaptable, and remember that, as always, your home-moving journey is as much about the voyage as the destination.

What are your thoughts on Crediton’s evolving property scene? Do you foresee any other trends or shifts? Engage with us—your local insights and experiences enrich this ongoing dialogue.

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The Hidden Perils of Overpricing Your Crediton Home

In an age of soundbites and sensationalism, the UK property market—particularly here in Crediton—often finds itself misconstrued by general narratives.

While we cannot ignore the challenges of increasing mortgage rates and shifting buyer preferences, it is vital to appreciate the broader context to understand what’s happening in the Crediton property landscape.

The UK housing market is currently at a crossroads, characterised by its lowest house price growth since 2012. High mortgage rates are making a significant dent in market activity, affecting everything from buyer demand to the volume of property sales.

Crediton properties are still selling but not at the rate or level they were in 2021. Therefore, correctly pricing your property for sale cannot be underestimated. Let me explain why, then the reasons behind the current state of play nationally, and finally, the exact story of what is happening now (and in the future) in Crediton.


The Importance of Correctly Setting an Asking Price for Your Crediton Home

Putting your Crediton property on the market at too high an asking price can significantly deter potential buyers and limit the number of people who come to view it.

Buyers often have a budget range in mind, and if your property is priced above comparable homes in the area, it’s likely to be filtered out of search results and go unnoticed.

Even if the property gets some attention, the inflated price can send a message that you’re not serious about selling or unwilling to negotiate. This can result in your property languishing on the market, which could necessitate future price reductions.

Over time, a stale listing may become stigmatised, leading buyers to suspect that something must be wrong with the property beyond its high price.

Thus, setting a realistic, market-aligned asking price is crucial for attracting a broad pool of qualified buyers and facilitating a quicker, more lucrative sale.


The Impact of High Mortgage Rates

High mortgage rates are putting a strain on the housing market. The latest data shows a significant fall in demand from buyers — about a third less than the average during the same period over the last five years (2018-2022).

Nationally, this year, the number of properties sold stc has been 750,113 (to the end of August). That same sales figure to the end of August 2022 was 903,799 (a 17% decrease), and to the end of August 2021, 1,020,439 (a 26.49% decrease).

Mortgage-backed sales are particularly hit hard, expected to be just over a quarter lower than last year. Cash sales are expected to be less affected, but the overall market activity remains sluggish.


Regional Disparities

An interesting aspect of the current housing market is the distinct regional disparity. Looking at the £ per square foot of the sales agreed (not completed) of the August 22 sales vs. August 23:

  • East of England: -4.85%
  • North East: -3.71%
  • South East: -2.99%
  • Wales: -2.02%
  • East Midlands: -1.72%
  • Yorkshire and The Humber: -0.85%
  • West Midlands: -0.62%
  • North West: -0.54%
  • Outer London: -0.44%
  • Inner London: -0.13%
  • South West: 2.85%
  • Scotland: 3.88%

In the East of England (as a region), house prices have fallen by just under 5% over the last year. Conversely, there’s been a 3.8% increase in house prices in Scotland.


First-time Buyers and Affordability

High mortgage rates are affecting first-time buyers disproportionately. In 2021/2, low mortgage rates made buying a Crediton home cheaper than renting, spurring a wave of first-time buyers. However, with current mortgage rates soaring above 5%, renting has now become cheaper on average than buying for a first-time buyer property in some regions.


The Role of Wage Growth

Despite the bleak outlook, there is a silver lining. Faster wage growth is making housing more affordable.

Average wage rises of 8.2% over the past year are helping to balance out the effect of higher mortgage payments on first-time buyers’ household incomes. As a result, the gap between house prices and earnings is closing, and affordability is expected to improve by 10% over 2023.


Focus on Crediton

In 2021, an average of 33 properties were coming onto the market in the Crediton area per month, whilst there was an average of 42 properties selling monthly.

In 2022, an average of 41 properties were coming onto the market in the Crediton area per month, yet there was only an average of 38 properties selling each month.

To the end of August 2023, there has been a further increase in new properties coming on the market (an average of 51 properties coming onto the market in the Crediton area per month). Yet, demand has dropped further as only an average of 32 properties have been selling per month.

Note: Crediton = EX17.


The Curse of Overvaluing and How it Could Cost You Your Dream Home

Overvaluing homes is becoming a concerning trend in Crediton, often led by estate agents more interested in listing as many properties as possible rather than making actual sales.

Overvaluing harms homeowners, tempting them with unrealistically high prices only to advise price reductions later. The problem is your dream home might have sold by then.


The Future of the Crediton Housing Market

The immediate future doesn’t hold much promise for dramatic house price growth in Crediton, nor is it expected to fall dramatically.

However, factors like an ageing population, more flexible work arrangements, a strong labour market, and high immigration rates could stir market activity in the next few years.

The UK housing market is navigating through turbulent waters with high mortgage rates and a severe slowdown in house price growth. However, faster wage growth could be a game-changer, making housing more affordable in the long term.


Conclusion

Buyers and sellers can make more informed decisions by understanding these trends and potential future shifts. The market might be under strain now, and homeowners need to be realistic with their pricing; these indicators suggest we might be heading towards a more balanced and accessible market in the coming years.