Thursday 14 January 2016

What does 2016 have in store for the Chelmsford Property Market?

Chelmsford house prices up or Chelmsford house prices down? ... and if so, by how much? Those of you who read the Chelmsford Property Blog will know I am not the sort of person who pulls punches nor someone who ever fails to give a forthright and straight talking opinion – so here are my thoughts for the 32,357 Chelmsford homeowners and landlords.

The average Chelmsford property is 7.9% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease (although I was reading in The Times the other day that wage inflation (ie salary growth) is showing signs of weakening).

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016 will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would REALLY mean for Chelmsford landlords in my blog, but I believe the real issue in the Chelmsford property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election (back in May) of 200,000 new homes a year.  All I can say is .. good luck George hitting those numbers!

Why? Because houses take years to build .. not months .. so George and his fabled house building aside .... where does that leave us in Chelmsford in 2016?

Well, talking of supply ... whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a high viz jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in December 2011, 869 properties were for sale in Chelmsford .. today that figure is 389. On the face of it, this means there is less choice for Chelmsford buyers – but it also means with a restricted supply of properties for sale .. it keeps property prices high for Chelmsford house sellers.
Everything isn’t all doom and gloom though ... again back in December 2011, the average property in Chelmsford took 88 days to find a buyer .. latest figures state this has dropped to 55 days .. a drop of 38% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Chelmsford is the 3 bed, which only takes 35 days to find a buyer (on average) compared to the 2 bed, which takes 87 days. It just goes to show, even though the average has dropped since 2011, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Chelmsford in 2016?  I am going to suggest they will rise between 6.5% and 7.5% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015! For more thoughts, opinions and views on the Chelmsford property market .. visit the Chelmsford Property Blog

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