Short supply of Plymouth houses pushes up property prices
12-04-2015
EXPERT ADVICE: Short supply of Plymouth houses pushes up property prices
By Plymouth Herald
A growing imbalance between supply and demand is sending homes further out of reach
A LACK of supply has pushed up property prices in the South West for yet another month according to the Royal Institution of Chartered Surveyors (RICS), which said house prices in October rose across all regions of the UK.
In its monthly survey of the property market, RICS forecasts that values will go up by about 4.5 per cent over the next five years – a cumulative increase of nearly 25 per cent.
RICS has warned a growing imbalance between supply and demand is causing "price pressures to build", sending homes further out of reach.
Joanna Churchill, senior negotiator at Luscombe Maye in Yealmpton, said: "Our prices are very much affected by what happens in the rest of the country, rather than locally."
About half the properties she sells are to buyers relocating to South Devon from other regions in the UK – many are retired: "They have cash from even higher prices elsewhere."
The village is also popular with professionals commuting to Plymouth. Ms Churchill described house price growth as "steady", with the Land Registry heat map showing prices increases between zero and five per cent.
Experts say structural changes to the housing market are limiting the supply of houses. These include the rise of amateur landlords. With the rise in property prices, more homeowners are investing in property to rent out.
Ms Churchill said the lower end of the market had seen the steepest percentage rise in prices, possibly due to competition between first-time buyers and landlords.
She said: "I don't sell houses to 20-year- olds. I would say people purchasing properties are older but that could be because this is a more expensive area and a lot of buyers are retired and cash purchasers. We do still have families moving in."
On the supply side, about 120 new homes have been built in Yealmpton in the past two years, and a new town is being built at Sherford. South Hams District Council restricts the sale of ex-council houses to buyers who have lived in Devon for three years, to have a supply of affordable homes for local people.
Liz Roberts-Smith, sales director of At Home Property in Plymouth, said estate agents who "over-price and under-deliver" are partly to blame for pushing up prices.
She said: "There is a lot of competition now and sometimes that does lead to higher valuations but because the properties don't end up selling at that price, it can be detrimental." Ms Roberts-Smith said properties going on the market at the right price quickly sell. But those with inflated prices can stagnate before having to drop in price to achieve a sale.
Buying a property is the largest investment most people will ever make.
Experts recommend a property survey to be aware of any structural problems before buying. Visit price comparison website www.localsurveyorsdirect.co.uk to find a surveyor in your area.
Paul Curtis, director at Moving On estate agents in Plympton, said: "There is definitely a lack of decent, quality new instructions but I don't necessarily think that pushes prices up."
He added that the market was traditionally quieter at this time of year.
Mr Curtis said he had not noticed an increase in amateur landlords in Plympton but added it was a different market to Plymouth centre.
"Most people in Plympton are families. We don't get an awful lot of first-time buyers," he said, adding that the area is popular with families because of the schools.