“How much would it cost to buy all the properties in Boston?”

£2.51bn – The total value of all Boston Property Market

In the last 14 years, since the autumn of 2002, the total value of Boston property has increased by 69% or £1.02 billion to a total of £2.51 billion. Interesting, when you consider the FTSE100 has only risen by 68.9% and inflation (i.e. the UK Retail Price Index) rose by 38.7% during the same 14 years.

When we delve deeper into the numbers, the average price currently being paid by Boston households stands at £134,503. If we then split the property market down into individual property types in Boston; the average numbers come out like this ..

Boston Property Market
Average Value of a Detached Property Average Value of a Semi-Detached Property Average Value of a Terraced/Town House Property Average Value of an Apartment
£194,768 £128,854 £100,214 £108,562

… yet it got even more fascinating when I multiplied the total number of each type of property by the average value. As detached houses are so expensive, when you compare them with the much cheaper terraced/town houses and apartments, you can quite clearly see how valuable detached properties are in terms of total pound note value, when compared to the value of the terraced/town houses and apartments.

Total Value of all the Boston Detached Properties Total Value of all the Boston Semi-Detached Properties Total Value of all the Boston Terraced/Town House Properties Total Value of all the Boston Apartments
£1,182,241,760 £701,352,322 £348,844,934 £274,987,546

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So, what does this all mean for Boston?  Well as we enter the unchartered waters of 2017 and beyond, even though property values are already declining in certain parts of the previously over cooked Central London property market, the outlook in Boston remains relatively good as over the last five years, the local property market was a lot more sensible than central London’s.

Boston house values will remain resilient for several reasons. Firstly, demand for rental property remains strong with continued immigration and population growth.  Secondly, with 0.25 per cent interest rates, borrowing has never been so cheap and finally the simple lack of new house building in Boston not keeping up with current demand, let alone eating into years and years of under investment – means only one thing – yes it might be a bumpy ride over the next 12 to 24 months but, in the medium term, property ownership and property investment in Boston has always, and will always, ride out the storm.

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Boston property market sees an un-predicted Autumn boost of 32%

 

I met an old client of mine recently and we got talking about the Boston property market. I had just completed my research for my next blog article and I would like to share with you the parts of the conversation relating to the Boston property market.

He asked me what my thoughts were about the last half of the year in regard to the Boston property market and if there were any great buy to let deals around. In reply I said that, in my view, shrugging off the uncertainty of the initial post Brexit vote, I have seen an increase in supply and a rise in the number of properties selling at the lower to middle end of the market, meaning both first time buyers and buy to let landlords have been returning in the last few months – proof the market is beginning to bounce back.

So – let’s look at the numbers

In November 2016, according to the three main property portals (Rightmove, Zoopla and OnTheMarket) there were a total of 411 properties for sale in Boston (within 2 miles of the centre of Boston to be exact). In November 2015, there were only312 properties for sale, a rise of 32%.

When I split it down into bedrooms (note things like building plots and part commercial/part residential etc won’t be in these figures so the numbers below wont exactly match up to those in the above paragraph).

 

  # Properties on the market in Nov 2015 # Properties on the market in Nov 2016 Per cent Change
5+ Bedrooms 18 29 61%
4 Bedrooms 72 60 -17%
3 Bedrooms 106 148 +40%
2 Bedrooms 97 134 +38%
1 Bedroom 19 32 +68%

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.. and when I looked at type of properties  .. it got even more interesting

 

Type of Property # Properties on the market in Nov 2015 # Properties on the market in Nov 2016 Per cent Change
Detached 138 167 +21
Semi 75 107 +43%
Terraced 51 64 +25%
Flat 35 60 +71%

As the number of Boston properties put up for sale has soared by 32%, homeowners have become more realistic about how much their homes are worth. This increase in homeowners wanting to sell suggests there is renewed confidence in the Boston property market and there are also signs that people are being more realistic about pricing their property.

As you can see, there has been a significant uplift in flats and semi-detached properties, which means there is greater choice for first time buyers and landlords. So with a combination of realistic pricing and more properties on the market – both first time buyers and landlords alike might be able to pick up a few bargains!

Boston property price rises set to be more restrained in 2017 due to Brexit

While Brexit has not yet had a sizeable impact on the Boston housing market, my analysis is pointing to the fact that the economic viewpoint still remains uncertain and Boston property price growth is likely to be more subdued in 2017 – although that isn’t a bad thing so let me explain.

Since the summer, apart from a little wobble of uncertainty a few weeks after the Referendum vote, property values and the economy, on the whole has outperformed what most people were anticipating. In fact, when I looked at the property prices for our Boston Borough Council area, these were the results…

October 2016              – drop of 2.39%

September 2016         – rise of 0.08%

August 2016                – rise of 1.89%

July 2016                     – drop of 1.59%

June 2016                    – rise of 2.34%

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The UK property market continues to perform robustly, because we can’t just look at Boston as if in its own little bubble, with annual price growth set to end this year at 6.91% and most East Midlands region property market at 7.52%.

The significant tidal wave of growth seen from 2013 through to 2015 in the capital has subdued over the last six months. However, as that central London house price wave has started to ripple out, agents are starting to see stronger property growth values in East Anglia and the South East regions outside of London, than what is being seen within the M25. So, fellow Boston landlords and homeowners, is this the time to get your surfboards ready for the London wave?

Well, we in Boston haven’t really been affected by what is happening in the central London property mega bubble (i.e. Kensington, Chelsea, Marylebone, Mayfair etc.). The property market locally is more driven by sentiment, especially the ‘C’ word … Confidence. The main forces for a weaker Boston Property market relate to economic uncertainty surrounding the Brexit process, which I believe will impact unhelpfully on consumer confidence in the run up to and just after the serving of the Section 50 Notice by the end of Q1 2017.

In addition, the influence of reforms to the taxation of landlords is expected to result in a reduced demand from buy to let landlords, which will limit upward pressure on property values. However, on the other side of the coin, demand from tenants has been strong, but this has been counterbalanced by a strong supply of rental properties. In my opinion, there is a slight risk of rents not growing as much in 2017 as they have in 2016, but by 2018 they will rise again to counteract Philip Hammond’s changes to tenant fees.

The broader Boston rental market looks relatively positive with modest rental growth expected and rents might rise further if landlords begin to sell properties in an effort to offset to the impact of tax rises.

So what do I predict will happen to the Boston housing market in 2017?  In Boston, I believe property values are expected to rise by 1.5% in 2017, compared to a rise of 5.04% last year, then picking up again with a rise of 2.4% in 2018, 3.1% in 2019, 4.6% 2020 and 6.1% in 2021.

But these predictions do not take into account any effect of a possible snap General Election or further referendum on ratifying any Brexit deal if that comes to pass in the future.

If you would like to know the current market valuation of your property then we are able to offer you a FREE – Instant On-Line Valuation for both sale and letting. Simply visit our website

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