Bexley Borough Property Values increased by 16% in 2015 – where are they heading now?

Bexley Borough property values rose by 16% in 2015, outperforming the national average of 12%. Bexley Borough featured among the top 10 performing areas in England.

I expect future property price growth to remain firm, built on the foundations of an improving labour market, strengthening economy and very low mortgage rates. From talking to other agents, mortgage arrangers and solicitors in the area (all of whom have their fingers on the pulse of the Bexley property market), I know that the steady long term growth in Bexley property prices is likely to continue. So far, demand has been strong, while there remains an underlying lack of supply and an ongoing low mortgage rate.

As all my blog readers know, I like to give a balanced and honest opinion, so I would like to highlight a couple of key points: low interest rates and a lack of supply.

Interest rates - In a speech at Lincoln Cathedral Mark Carney, Chief of the Bank of England, said that the Bank would seriously consider raising interest rates around the end of 2015. As we know now, that didn’t happen. However, any 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 (57%, to be exact) with a mortgage had a variable rate, compared with more than one in seven (73%) in the summer of 2012. Now, I am not a mortgage arranger and cannot give advice, but it is clear that rates are only going in one direction, even if the rise comes later than expected. Whether you are a landlord or home-owner, this might be a good time to consider fixing your mortgage rate – don’t say I didn’t warn you!

Shortage of Supply – As I have mentioned before, the number of houses on the market in Bexley is low at present. One reason is that many buy-to-let landlords have invested in Bexley property over the past fifteen years.

Unlike first time buyers, who tend to move on after a few years, landlords generally keep their properties for the long term. Fewer properties come onto the market, restricting supply and sales. Over the last two months only 624 Bexley properties have been sold, compared to 707 in the same time frame in 2014. At 11.74%, that’s a significant drop.

Now that George Osborne is on the attack with his brutal new tax rules aimed at landlords, things could get even worse. Many experts believe that if landlords stop acquiring properties rents could be forced up, making it even harder to become a homeowner. Conversely, if they started selling off their stock there would be fewer homes available for rent, forcing up prices and making it harder for first time buyers to save for a deposit.

What are landlords likely to do? Despite the new tax rules, buy-to-let mortgages are cheaper than ever. According to analysis by Moneyfacts.co.uk, the number of buy-to-let loans on offer has more than doubled over the past two years.

Investing in buy-to-let property may well continue to be an exceptional way to generate long-term returns. It’s one of the few investments that can provide an income now, boost your future pension, benefit from capital appreciation and provide a tangible legacy for your loved ones. However, landlords need to select their location and investment strategy carefully.

If you are planning to invest in the Bexley Borough property market, or just want to know more about making a successful buy-to-let investment, you will find a lot of information here, on the Bexley Borough Property Blog – and you are always welcome to give our office a call on 01322 559955.