“What’s happening to the Leighton Buzzard Property Market” is a question I am asked repeatedly. Well, would it be a surprise to hear that my own research suggests that there isn’t just one big Leighton Buzzard property market – but many small micro-property markets?
According to recent data released by the Office of National Statistics (ONS), I have discovered that at least three of these micro-property markets have emerged over the last 20+ years in the town.
For ease, I have named them the …
The ‘lower’ and ‘lower to middle’ sectors of the Leighton Buzzard property market have been fuelled over the last few years by two sets of buyers. The first set, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Leighton Buzzard property market to take advantage of alluringly low prices and even lower interest rates. The other set of buyers in the ‘lower’ and ‘lower to middle’ Leighton Buzzard property market are the first-time buyers (FTB), although the FTB market is in a state of unparalleled deadlock as it’s been trampled into near-immobility and incapacity by the new 2014 stricter mortgage affordability regulations and also fewer mortgages with low deposits.
Some of you may be interested to know how I have classified the three sectors ..
…. and if one looks at the figures for Central Bedfordshire Council area you can see the three different sectors (lower, lower/middle and middle) have performed quite differently.
You can quite clearly see that it is the ‘lower to middle’ market that has performed the best.
You might ask, what do all these different figures mean to homeowners and landlords alike? Quite a lot – so let me explain. The worst performing sector (with the lowest Percentage uplift) was the ‘middle’ housing market. Therefore, interestingly, if we applied the best percentage uplift figure (i.e. from the ‘lower to middle’ market percentage uplift), to the ‘middle’ 1995 housing market figure, the 2017 figure of £291,340, would have been £323,725 instead – quite a difference you must agree?
Now, I have specifically not mentioned the upper reaches of the Leighton Buzzard housing market for several reasons. Firstly, the lower or middle market is where most of the buy to let investment landlords buy their property and where the majority of property transactions take place. Secondly, due to the unique and distinctive nature of Leighton Buzzard’s up-market property scene (because every property is different and they don’t tend to sell as often as the lower to middle market), it is much more difficult to calculate what changes have occurred to property prices in that part of the Leighton Buzzard property market - looking at the stats for the up-market Leighton Buzzard property market from Land Registry, only 28 properties in Leighton Buzzard (and a 5 mile radius around it) have sold for £1,500,000 or more since 1997.
So, what should every homeowner and buy to let landlord take from the information that there are many micro-property markets? Well, when you realise there isn’t just one Leighton Buzzard Property Market, but many Leighton Buzzard “micro-property markets”, you can spot trends and bag yourself some potential bargains. Even in this market there are still a number of bargains to be found with the right research especially in the ‘lower’ and ‘lower/middle’ market.
For more thoughts on the Leighton Buzzard Property Market, please visit the Leighton Buzzard Property Market Blog
I would love to know if you have spotted any micro-property markets in Leighton Buzzard.
The most recent set of data from the Land Registry has stated that property values in Leighton Buzzard and the surrounding area were 10.05% higher than 12 months ago and 31.21% higher than January 2015.
Despite the uncertainty over Brexit Leighton Buzzard (and most of the UK’s) property values continue their medium and long-term upward trajectory. As economics is about supply and demand, the story behind the Leighton Buzzard property market can also be seen from those two sides of the story.
Looking at the supply issues of the Leighton Buzzard property market, putting aside the short-term dearth of property on the market, one of the main reasons of this sustained house price growth has been down to of the lack of building new homes.
The draconian planning laws, that over the last 70 years (starting with The Town and Country Planning Act 1947) has meant the amount of land built on in the UK today, only stands at 1.8% (no, that’s not a typo – its one point eight percent) and that is made up of 1.1% with residential property and 0.7% for commercial property. Now I am not advocating building modern ugly carbuncles and high-rise flats in the Cotswolds, nor blot the landscape with the building of massive out of place ugly 1,000 home housing estates around the beautiful countryside of such villages as Little Brickhill, Stoke Hammond and Hollingdon.
The facts are, with the restrictions on building homes for people to live in, because of these 70-year-old restrictive planning regulations, homes that the youngsters of Leighton Buzzard badly need, aren’t being built. Adding fuel to that fire, there has been a large dose of nimby-ism and landowners deliberately sitting on land, which has kept land values high and from that keeps house prices high.
Looking at the demand side of the equation, one might have thought property values would drop because of Brexit and buyers uncertainty. However, certain commenters now believe property values might rise because of Brexit. Many people are risk adverse, especially with their hard-earned savings. The stock market is at an all-time high (ready to pop again?) and many people don’t trust the money markets. The thing about property is its tangible, bricks and mortar, you can touch it and you can easily understand it.
The Brits have historically put their faith in bricks and mortar, which they expect to rise in value, in numerical terms, at least. Nationally, the value of property has risen by 635.4% since 1984 whilst the stock market has risen by a very similar 593.1%. However, the stock market has had a roller coaster of a ride to get to those figures. For example, in the dot com bubble of the early 2000’s, the FTSE100 dropped 126.3% in two years and it dropped again by 44.6% in 9 months in 2007… the worst drop Leighton Buzzard saw in property values was just 19.51% in the 2008/9 credit crunch.
Despite the slowdown in the rate of annual property value growth in Leighton Buzzard to the current 10.05%, from the heady days of 13.88% annual increases seen in early 2015, it can be argued the headline rate of Leighton Buzzard property price inflation is holding up well, especially with the squeeze on real incomes, new taxation rules for landlords and the slight ambiguity around Brexit. With mortgage rates at an all-time low and tumbling unemployment, all these factors are largely continuing to help support property values in Leighton Buzzard (and the UK).
Daniel Bourke is the owner of Belvoir Lettings Dunstable and in his previous career in Architecture he was an Associate in a leading London Architectural practice