With most Neath families
home schooling their children in lockdown and the forthcoming Land Transaction Tax Holiday deadline on the 31st March 2021, less Neath
properties have been coming onto the Neath property market since the new year.
This has prompted a 16% drop in the supply of Neath homes for sale
compared to September 2020.
For the past couple of
decades, like clockwork, Neath estate agents’ busiest times for putting
property onto the market is the new year to Easter rush, with a smaller flurry
of new properties coming onto the market in the mid/late summer. Yet, since the
ending of lockdown 1.0 in the late spring 2020, nothing has been normal about
the Neath property market.
Throughout the summer,
the number of properties coming onto the market in Neath steadily rose to its
peak in September and the number of properties then becoming sold subject to
contract (stc) rose even higher (and whilst statistics don’t exist for the
properties sold stc, anecdotal evidence suggests there were just under
50% more Neath properties sold stc in the last six months of 2020, compared to
the same 6 months in 2019).
However, back to the
number of properties for sale…
the peak of the number of Neath
properties on the market in autumn was 175 –
that now stands at 148.
The first lockdown
caused many Neath homeowners to want to move with the need for extra space to
work from home and in some cases larger gardens. This was further exacerbated
by Neath home movers also trying to take advantage of the Land Transaction Tax Holiday
to save themselves money on this tax.
This meant many more Neath
properties came onto the market (more than a “normal” year) in the last 6
months of 2020. However, those Neath home movers motivated to move for the
extra space/save money on the tax, did so in the summer/autumn and have already
placed their home on the market (and are probably by now sold stc rushing to
get their house purchases through before the deadline on the tax savings).
So, how does Neath
compare to other property markets, and what does this reduction in Neath
properties on the market mean to Neath homeowners and landlords?
There are 15% less properties on
the market today in Neath, compared to 12 months ago.
When I compared that to
the national picture, according to Zoopla, there are 12% less properties on the
market today (compared to a year ago).
However, the complete
opposite is taking place in London. There are currently 47,900 apartments for
sale in London compared to January 2020, when there were only 32,600 – a massive
rise of 46.9% … all the more interesting when there are only 15.1% more London
semi-detached houses for sale and 1.8% more London detached homes over the same
12-month period. The jump in London apartments for sale is being pushed by an
upsurge of London up-sizers eager to trade their city living apartment up to
suburban houses, and a small handful of panicky London buy to let investors who
are wanting to exit the London property market following falling rents for
apartments. Looking closer to home, there are…
29% more apartments for sale in Neath
than a year ago, whilst there are 29% less semi-detached homes.
So, whilst there are
some differences between the supply of individual types of property in Neath (e.g.
apartments vs semi-detached houses), the overall reduction in the number (i.e.
supply) of properties for sale can only mean one thing, when there is a
reduction in the supply of anything and demand remains stable, this will mean
continued upward pressure on Neath house prices in the short term (although I
suspect there will be some downward pressure on Neath apartments with that
level of increase in supply – maybe some interesting ‘opportunities’ for all
you Neath landlords?).
Will overall demand for Neath
property continue to be stable?
Lockdown 3.0 will
probably cause another wave of Neath people who want to move home (thus increasing
demand). The last property crash (the Credit Crunch in 2009) was caused by
a huge increase in the supply of properties for sale when people lost their
jobs and interest rates were much higher. People couldn’t afford their
mortgages and so dumped their homes onto the market all at the same time –
causing an oversupply of property for sale and hence house prices dropped.
Compared to the 148 properties
for sale in Neath today, at the height of the Credit Crunch in January 2009,
there were an eyewatering 651 properties for sale in Neath.
It was this increase in
the level of property for sale in Neath (mirrored across the whole of the UK) that
caused property prices to drop between 16% and 19% (depending on the type of
property) in Neath over the 12 to 14 months of the Credit Crunch. So, as long
as there is no sudden change in the demand or supply of properties and interest
rates remain at their current ultra-low level – the medium-term prospects for
the Neath property market look good.
If you are a Neath homeowner or a Neath buy to let landlord and want to chat about the future of the Neath property market, please get in touch and a friendly member of the team will be happy to help.
