I was looking through the latest Land Registry data and see that Glastonbury property values were 14.7% higher over the last 12 months than they were in the preceding 12 months. Compare this with 7% higher in Wells and 4% higher in Street for the same periods.
Overall, I expect future property price growth to remain firm, built on the foundations of an improving labour market, a strengthening economy, and low interest rates. This is good news for those investing in property in Glastonbury and the surrounding areas.
This is a view also held by the mortgage brokers and solicitors I talk to regularly (all of whom have their finger on the pulse of the Glastonbury property market). With an underlying lack of supply and the continued low interest rates, the slow but steady upward momentum of the Glastonbury property market is likely to continue for the rest of 2015 and in to 2016.
Lack of Supply
I have noticed for some time now that the number of houses on the market in Glastonbury is low.
One of the many reasons is the number of buy-to-let landlords who have bought property over the past fifteen years. Unlike first-time buyers who tend to move on after a few years, private landlords in Mid Somerset tend to keep their properties long-term, meaning there are less properties coming onto the market, and thus restricting supply and sales of properties for investment in Glastonbury.
In fact, over the period April-June, only 45 properties in Glastonbury have been purchased compared to 60 in the same time frame in 2014, a not-so-insignificant drop of 25%.
Interest Rates
Mark Carney (Chief of the Bank of England) said in a recent speech that the Bank will be considering raising interest rates around Christmas time of this year. An upward movement in interest rates will temper demand and result in a marked slowdown in house price growth. Mr Carney said that only six out of ten people had a mortgage (57% to be precise) had a variable rate mortgage, compared with more than seven out of ten people (73% to be precise) in the Summer of 2012.
I’m not a mortgage broker and cannot give financial advice, but rates are only going on one direction from here, so whether you are a landlord or owner-occupier in Glastonbury, this might be a time to consider fixing your mortgage rate. Certainly some of my clients have managed to pay off their mortgages at a faster rate while interest rates have been low.
If interest rates do rise, the affect on sentiment which, given the shortage of supply, would result in a marked slowdown in the rate of house price growth in various BA postcodes.
About Tom Morgan
Founder of Jungle Property the multi award-winning letting agent based in Glastonbury, Somerset. I am passionate about property and Glastonbury and about providing the very best advice to anyone who wants the best return on a buy-to-let property investment. For an open and brutally honest opinion on anything in the Glastonbury property market please contact me via tom.morgan@jungleproperty.co.uk
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