What does this year have in store for the Solihull Property Market?

Solihull house prices up or Solihull house prices down? ... and if so, by how much? Those of you who read the Solihull Property Blog will know I am not the sort of person who pulls punches or fails to give a forthright and straight talking opinion – so here are my thoughts for the 41,098 Solihull homeowners and landlords.

The average Solihull property is 4.9% higher today than it was a year ago, which doesn’t sound a lot, but when you consider inflation is currently running at -0.1% (ie consumer/retail prices are dropping) and average salary growth is only around 2.5% pa, this is bad news for first time buyers as property affordability continues to decrease. I was also reading in The Times the other day that wage inflation i.e. salary growth, is showing signs of weakening.

Some commentators have said the higher stamp duty taxes announced a few weeks ago in the Autumn Statement for buy to let landlords, as well as concerns over first time buyer affordability and the outlook of UK interest rate rises in 2016, will really dampen the property market. I hope you all read my previous article about what the new stamp duty rule changes would really mean for Solihull landlords, as I believe the real issue in the Solihull property market is the shortage of property to buy, as people either worry there will be no suitable house to move to, or cannot afford to upgrade. 

However, on the supply side, Mr Osborne said in his Autumn Statement that he will change the planning laws to ensure the government meets the pledge made at the General Election last year, of 200,000 new homes a year.  All I can say is, good luck George in hitting those numbers!

Why? Because houses take years to build, not months.  So, with George and his fabled house building aside, where does that leave the 2016 property market in Solihull?

Whilst Mr Osborne builds his properties (and let’s be honest - a week doesn’t go by without him being filmed on a building site with a hi-vis jacket and hard hat building a house here and there!), let us look at the shortage of properties for sale. Back in November 2011, 682 properties were for sale in Solihull, today that figure is 321. On the face of it, this means there is less choice for Solihull buyers – but it does also mean, with a restricted supply of properties for sale, the property prices are kept high for Solihull house sellers.

This does mean that it is a sellers’ market, back in November 2011, the average property in Solihull took 109 days to find a buyer, latest figures state this has dropped to 69 days an improvement of 37% in how long it takes to find a buyer. However, when you delve even deeper, the best performing type of property today in Solihull is the 3 bed, which only takes 42 days to find a buyer (on average) compared to the 1 bed, which takes 91 days. It just goes to show, even though the average has improved since 2011, how varied that change has been!

So, back to the question everyone is asking .... What will happen to property values in Solihull in 2016?  I am going to suggest they will rise between 3% and 4% ... nothing out of the ordinary, but unless something cataclysmic happens in the world, 2016 will be like 2015!