According to the Land Registry’s latest House Price Index for Rotherham and the surrounding locality, the value of apartments/flats is rising at a faster rate than terraced/town houses, semi-detached properties and even detached property.
Values of apartments in Rotherham have increased by 6.92% over the past year, which is proportionally 21% more than the Rotherham average rise of 5.74%. Flats and apartments haven’t outperformed all of the other types of properties by such a gulf since summer 2003.
Compare the performance of flats with the other property types performed:
- Detached homes rose by 6.44%
- Semi-detached homes rose by 5.65%
- Terraced/Town-Houses rose by 4.91%
As you can see, there is a moderate increase in the rate of property value growth across the board. However, no one should confuse it with a strong and vigorous healthy property market.
Instead, it is somewhat an indicator of the long-lasting lack of property on the market. In fact, I have spoken about the lack of homes for sale in Rotherham on a number of occasions and whilst it isn’t as bad as it was 12 months ago – choice is still quite limited for buyers.
The average property value in Rotherham now stands at £141,400.
When split down into property types:
- Rotherham Apartments: £104,600
- Rotherham Detached: £237,400
- Rotherham Semi-Detached: £126,800
- Rotherham Terraced/Town-House: £90,300
So why have Rotherham apartments performed so well, and is it just a Rotherham thing?
When I scrutinised the figures for the rest of the UK, it appears that apartments are pacemakers in the clear majority of the country. Of the 379 local authority areas in the UK, the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 of them.
So, should Rotherham apartment owners be getting out the Champagne?
Well, I would keep it on ice as the Land Registry figures are notorious for short term fluctuations. It’s hard to have faith in the fact that Rotherham house values rose rapidly last month given that, in the last six months, the Land Registry has frequently made downward revisions to their first published House Price Index figures.
Thankfully, the bigger picture from the Council of Mortgage Lenders (CML) stated that home buying activity last month was up 2% over the same month in 2016 – not bad as we have each quarter since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% – higher than the same month in 2016.
So, what next for Rotherham’s property market?
I believe the uplift in the values of apartments is a short-term blip. The real issue is with the way wage growth might not keep up with inflation. The impact of the change in exchange rate since Brexit will mean real wage growth stagnates. This will mean buyer demand growth will be curtailed and with property values already so full, I believe a renewed hastening in house price growth is unlikely.
I believe we are starting to return to the housing market we saw in the mid 1990s: steady demand, steady supply – nothing silly when it comes to house price growth.
I believe, with what is happening around us, that this isn’t a bad thing at all.
As always, if you have any questions please get in touch.