Well it has been one heck of a year so far. The market this year has been manic to say the least, with an acute shortage of stock leading to rapidly increasing property prices and huge competition between chain free buyers.
As previously reported, when we compare like for like homes this year to last year and compare values we can find numerous genuine examples of properties increasing in value at sometimes over £1000 a week. This market is unfortunately most frustrating for first time buyers who struggle to compete with chain free cash buyers and investors. In this sellers market vendors frequently have several purchasers to choose from. Consequently they are perhaps understandably choosing the strongest buyers with the least complications and, as most first time buyers have mortgage requirements, this can invariably mean first time buyers are missing out. Add to this the fact that for every month they are unable to buy it is potentially costing them £4000 and you can’t help but sympathise with them.
With so many transactions completed over the last couple of years there are certainly plenty of opportunities to compare the market and make present day value comparisons with like for like homes sold last year. Looking at IOM Government registry sales and the obvious and easily compared property transactions we found the following data:
|Cronk y Berry||2 bed Terrace||Last year £190,000||This year £230,000|
|Farmhill||2 bed Terrace||Last year £195,000||This year £245,000|
|Birch Hill||3 Bed detached bungalow||Last year £395,000||This year £445,000|
|Governors Hill||3 bed semi detached||Last year £275,000||This year £325,000|
|Douglas||5 bed town house||Last year £295,000||This year £339,00|
|Douglas||3 bed 30s semi detached||Last year £295,000||This year £325,000|
|Ballakilley Port Erin||4 bed Maple detached||Last year £395,000||This year £440,000|
|Onchan||4 bed Maple detached||Last year £415,000||This year £450,000|
The factors that are fuelling the local property market haven’t really changed since our last property report in February. There is still a supply and demand issue and a lack of available homes up to £500,000. Local mortgages are still easily obtainable from numerous lenders with excellent interest rates and small deposits. Whilst inevitably our unemployment rate rose this year from 1.8% to 2.4% we still only have around 1100 residents registered as unemployed, which is remarkable in this climate. Bank interest rates for investors remain low which is tempting investors into the buy to let property market which currently has far more tenants than available properties. Consequently, with little change in any of the above factors that are fuelling the market, the local market seems set to continue to be a seller’s market, for the foreseeable future anyway.
Due to the pandemic and subsequent border restrictions our property market was historically made up of predominately local purchasers. However, this changed in June when our borders re-opened as this resulted in an influx of off Island purchasers that have been keen to purchase here for some time but were unable to do so due to the restrictions. This has boosted the market at the higher end of the price scale as numerous high value transactions were subsequently negotiated by most agents. This has lead to a shortage of stock in the £1million plus bracket where there is now very little choice to be had as even some of the older stock has now also been snapped up. There has never been a better time to sell at this price range and Manxmove now have a list of keen chain free buyers at this price level and up to £5million, so if you are considering selling at this level please let us know.
Whilst the market remains strong and stacked in the sellers favour there is definitely a limit to what prices the market will currently stand. Even in the hugely popular price range of around £300,000 a vastly overpriced property will attract very little interest so realistic and competitive pricing is still imperative if a quick sale is required. As always, new listings gain the most interest within the first few weeks of launch so overpriced homes can miss the new listing boat and this can sometimes result in a property requiring a substantial price reduction in order to rekindle interest. Agents tend to value by using other recently sold properties as comparables and there are plenty of historic sales out there so take your agents advice as he/she too wishes to sell your property quickly at the best possible price.
We always try and be 100% honest and accurate with our market reports and try to back up our statements with genuine data. So what about the future of our property market ? When local school children are on Summer holidays the local market always tends to be a bit quieter and this year was no different. To be honest this year the market is slightly quieter than normal now the school holidays are over but this could be down to the fact there is very limited stock at present and therefore very few properties to view. It will be interesting to monitor this on the lead up to Christmas and again make some comparables with last year. Whilst you can make an educated guess on the future of the market based on some of the things that are fuelling it, it is obviously impossible to be totally accurate. One thing is for sure, it cannot continue forever at its current pace and property values are highly unlikely to be sustainable long term at increases of over £1000 a week. Having said that I think it may eventually level out a bit as opposed to crash. For it to crash there would have to be a significant and substantial change to one or more of the above factors which is perhaps unlikely. Personally, if I was a property purchaser I would buy now and certainly wouldn’t wait as prices are unlikely to contract in the short term and long term property has always been an excellent investment. If you are currently renting and thinking of purchasing you can still buy a property with a mortgage cheaper than what you will pay to rent exactly the same property.
Graham Wilson FNAEA (Dip REA)
Manxmove Estate Agents