The Land Registry has just released their latest set of figures for the Epsom Property market. It makes interesting reading, as average property values in Epsom remained static in May. This leaves average property values 10.3% higher than 12 months ago, meaning the annual rate of growth in the town fell to its lowest level since July 2014. When we compare Epsom against the regional picture, South East property values rose by 0.9%, leaving them 9.1% higher than a year ago.
Obviously this is a far cry from the price rises we were experiencing in Epsom throughout 2014. At
one point (November 2014 to be exact) property values were rising by 14.1% a year. All the same,
even with the tempering of the Epsom property values in 2015, property values are still higher. This
is good news for local homeowners who had been affected by the downturn after 2007 and still find
themselves in negative equity.
However, the thing that concerns me is that the average number of properties changing hands (i.e.
selling) has dropped substantially over the last 12 months in the town. In April 2014, 124 properties
sold in Epsom but in April 2015, that figure dropped to 55. I have been in the Epsom property
market for quite a while now and the one thing I have noticed over the last few years has been the
subtle change in the traditional seasonality of the Epsom property market. It has been particularly
noticeable this year in that the normal post Easter flood of properties coming onto the market was
not seen. This has made an imbalance between supply and demand, with less houses coming onto
the market there is simply not as much choice of properties to buy in Epsom and with the population
of Epsom ever increasing, this will generally strengthen house price growth for the foreseeable
So what does all this mean for Epsom landlords or those considering dipping their toe into the buy to
let market for the first time? For many people, buy to let looks a good investment, providing
landlords with a decent income at a time of low interest rates and stock market unpredictability.
However, if you are thinking of investing in bricks and mortar in Epsom, it is important to do things
correctly. As an investment to provide you with income, for those with enough savings to raise a big
deposit, buy to let looks particularly good, especially compared to low savings rates and stock
market yo-yo’s. I must also remind readers, landlords have two opportunities to make money from
property, not only is there the rent (income), but with the property market bouncing back over the
last few years, property value increases has spurred on more investors to buy property in the hope
of its value continuing to rise.
Savvy landlords with decent deposits can fix their mortgages at just over 3% for five years, making
many deals stack up. Nevertheless, low rates cannot stay low forever, because one day they must
rise and you need to know your property can stand that test. I saw some Epsom landlords struggling
in the mid noughties, when interest rates rose from 3.5% in July 2003 to 5.75% in July 2007. That
might not sound a lot, but that was the difference of making a £100 a month profit in 2003 to having
to make up a shortfall in the mortgage payments of £100 per month in 2007.
Its true many landlords were thrown a life raft when the base rate dropped to 0.5% in March 2009.
Whilst interest rates have remained there since, mark my words, they will rise again in the future.
However, even with the potential for costs to rise, demand for decent rental properties remains high
as there are ever more tenants in the market, driving up demand and thus rents. The British love of
bricks and mortar plus improving mortgage deals also add up to fuel the buoyant Epsom property
If you are planning on investing in the Epsom property market, or just want to know more, things to
consider for a successful buy to let investment, one source of information is here at the Epsom Property
Blog or email Ian at email@example.com