The South East of England
property asking prices jumped by more than £4,000 to £376,862 in May according
to Rightmove, an increase of 1.1% from April but only 3.1% higher than a year
ago. After the traditionally quiet months of January and February, the property
market starts to heat up, but talking to some Teddington Estate Agents, they
are reporting their lowest ever stocks of quality property for sale. However,
asking prices have no relation to what property sells for! With
property, the definition of price is what someone is prepared to pay, not what
the agent thinks it’s worth!
So, is the issue a lack of
supply?
Putting aside Teddington’s
housing supply shortage, (according to the last Census, across the
Twickenham/Teddington area we only built 561 properties in the last decade, but
the population of the same area grew by 8,527)! This is now, according to some
people, being exaggerated by an increase in homes being owned by buy to let
investors. Landlords tend to be buying a property as part of a long term
pension plan and are more likely to keep it for longer than an owner occupier
would. I have also seen unwillingness among homeowners, thinking about moving,
to put their own property on the market as they can find few suitable
properties to make it worth their while going through the whole moving process.
There are some new build developments underway in the Teddington area though,
so hopefully with the influx of some new properties, this should level out the
property market again. (How affordable they are though when including the
developers premium in an already premium area is a whole different issue)!
What I would say to that is
that I believe this is the new norm in the Teddington property market and is
the consequence of not enough homes being built to meet the escalating growth
in household numbers. This will inevitably result in a lack of quality homes
for sale in many popular areas of Teddington.
When one looks at the historic
data, in May 2007, there were 327 properties on the market in Teddington
compared to today’s 234. Should we be worried? Well in May 2010, there
were 268 properties for sale in Teddington but six months later in November 2010;
this had jumped to 315 properties, for it to drop to 248 properties in January
2011. The number of properties on the market is a cyclical thing in Teddington;
it always has been and always will be. As we go into the summer of 2015, the
number of new properties coming onto the market will increase... just as
the sun will shine!
So are landlords to blame?
Well, on one side of the coin, yes they are. If they buy a property to rent
out, that means someone can’t buy it to live in. However, it doesn’t matter if
someone wants to live in a property if they can’t afford the deposit and
upkeep. So, on the other side of the coin, if the building of new properties is
slow and people can’t afford the large deposit for the mortgage, then Teddington
landlords have stepped in and bought property to rent out to them. Local
landlords have bought 2698 properties over the last decade and now house 20,857
people across Teddington and Twickenham alone.
There is also an issue with the
supply of housing in the rental sector. Whilst investor landlords are buying more
property, where properties are currently tenanted, tenants are not moving out
because they are unable to buy due to reasons mentioned earlier. This is having
an impact on the rental prices as well, with average rental prices having risen
by 23% in the last 2 years.
That sounds like a win-win
situation for investors to me! It will be interesting to see what happens once
the new developments in Teddington are completed.
The demand from Teddington
tenants for Teddington property is only set to rise over the coming years. If
you want some advice on where (or not) to buy, please do email or call me. I’d
love to hear from you!
Rebecca Smith
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