Where will Bexley Borough Property Prices be by 2021?

Recently I was having lunch at Hamers in Bexley Village with a local solicitor friend when the subject of property came up. 

“What are your thoughts on the Bexley Borough property market for the next five years?” he asked.

Property prices are a British national obsession and a key driver of the consumer economy. What will happen next in the property market? 

This is what I told my friend:

Before I can predict what will happen over the next five years, I need to look at what has happened over the last five years. One of the key drivers of the housing market and property values is unemployment (or the lack thereof), as that drives confidence and wage growth – key factors as to whether people buy their first house, move up the property ladder, or, if they are buy-to-let landlords, decide whether or not to continue purchasing property. 

When the Tories came to power in May 2010, the total number unemployed in our suburb stood at 1,857 (or 4.2% of the working age population). Last month, this had dropped to 756 (or 1.7% of the working age population).

As the Bexley Borough job market has improved, salaries are rising, growing at their highest level since 2009, at 3.4% per year in the private sector (as recently reported by the ONS). Property values in the Bexley Borough area continue to increase and are 36.88% higher today than five years ago. 

Many home occupiers have refrained from moving over the past seven to eight years, following the Credit Crunch. As the outlook is now more optimistic, I expect at least some to seize the opportunity to move, releasing pent up demand and putting more stock on the market. With a more stable local economy, I believe that this will drive a slow, clearly defined, five year wave of activity in home sales and continued price growth.

I forecast that the value of the average home in 
Bexley Borough will increase by 21.8% by 2021

21.8% might sound optimistic. However, according to Land Registry, for example, values are currently rising in Bexleyheath at 12.7% year on year. I believe my forecast to be fair, reasonable, and a reflection of both positive and negative aspects of the local property market and wider UK economy. 

I do have some slight concerns: The number of properties for sale in Bexley Borough is lower than five years ago, restricting choice for buyers (while also keeping prices higher). Interest rates were predicted to rise around Easter 2016, but now it seems that this is more likely to happen approaching Christmas 2016. Finally, consider the new buy-to-let taxation rules that will be introduced between 2017 and 2021 – although I believe that choosing the right sort of property/portfolio mix in Bexley Borough will mitigate issues with them.

I advise landlords that, with interest rates at their current level of 0.5%, the cash in their Building Society passbooks will grow so slowly that it might as well be under their bed. Property prices, however, have rocketed over the years, even after the property crashes, far outstripping bank accounts and inflation. 

Property is a long term investment with ups and downs, but in the long term it has always outperformed most investments. Bexley Borough residents in their forties and fifties would be mad not to include property in their long term financial calculations. Just make sure you buy the right property, at the right price, in the right location. 

One source of information on such matters is the Bexley Borough Property Blog, www.bexleyproperty.co.uk, and you are always welcome to call us at our office at 01322 559955.