I was having dinner the other day at Goldbrick House on Park Street in Bristol with a local financial adviser friend of mine when the subject of property investment came up.
He asked me my thoughts on the Bristol Property Market for the next five years, and as a leading letting agent covering all BS postcodes, I pondered his question.
Property prices are both a British national obsession and a key driver of the British consumer economy. What will happen next in the Bristol Property Market?
So here’s what I told him, and I’m going to share it with you on my Bristol Property Blog.
Before I can predict what will happen over the next five years to Bristol house prices, firstly I need to look at what has happened over previous last five years.
One of the key drivers of the housing market and property values is unemployment, as that drives confidence and wage growth. Our Bristol property agents monitor this for clients.
These are key factors to whether people buy their first house, existing homeowners move up the property ladder, and even property investment landlords have an appetite to continue purchasing buy-to-let properties in Bristol.
When the Tory’s came to power in May 2010, the total number of people who were unemployed in Bristol stood at 2,668, or 4.85% of the working age population in Bristol parliamentary constituency’s.
Last month, this dropped to 1,242 people, or 2.2% of the working age population in the city.
As the Bristol job market has improved with better employment prospects, salaries are rising too, growing at their highest level since 2009, at 3.4% per year in the private sector as recently reported by the ONS.
That is why, even with the turbulence of the last few years, property values in Bristol are 26.57% higher today than they were five years ago.
Many home occupiers have held back moving house over the past seven to eight years following the Credit Crunch but with the outlook more optimistic, I expect at least some to seize the opportunity to move home, releasing pent up demand as well as putting more housing stock onto the market. Our Bristol letting agents are monitoring this closely.
With a more stable economy, this will, I believe, drive a slow but clearly defined five year wave of activity in home sales and continued house price growth in Bristol.
I forecast that the value of the average home in Bristol will increase by more than 43% by 2021. Our letting agents in Bristol will be reporting back to our clients regularly on this.
43% might sound optimistic to some, but according to Land Registry, values are currently rising in Bristol at 9.2% year-on-year, I believe my forecast to be fair, reasonable and a reflection of both positive (and negative) aspects of the local property market and wider UK economy as whole. Our landlord services in Bristol have never been busier.
However, it wouldn’t be correct not to mention those potential negative issues as I do have some slight concerns about the future of Bristol housing market.
The number of properties for sale in Bristol is lower than it was five years ago, restricting choice for buyers – yet the other side of the coin is that this keeps house prices higher.
Interest rates were being predicted to rise around Easter 2016, but now I think it will be nearer Christmas 2016 and finally the new buy-to-let taxation rules which are being introduced between 2017 and 2021 – although choosing the right sort of property/portfolio mix in Bristol will, I believe, mitigate those issues with the next series of taxation rules.
I am telling the Bristol property landlords I speak to that with interest rates at their current level of 0.5%, the cash in your Building Society Passbook is going to grow so slowly that it might as well be kept under their bed.
Property prices in Bristol, by contrast, have rocketed in recent years – even after the property crashes, far outstripping bank accounts and inflation.
So my final thought: property is a long-term investment, it has its up and downs, but it has always outperformed, in the long term, most other forms of investment in Bristol.
Those in their 40’s and 50’s in Bristol would be mad not to include property in their long term financial calculations.
Just make sure you buy the right Bristol property, at the price, and in the right location.
To keep up-to-date with the rented property sector in Bristol, visit my property blog here.
If you’d like to find out more about how our letting agents in Bristol can help you with our award-winning property management services, letting agency services and landlord services, please feel free to get in touch with me direct on firstname.lastname@example.org.