The Reading housing market is a fascinating beast and has been particularly interesting since the Credit Crunch of 2008/9 with the subsequent property market crash. There is currently some talk of a 'property bubble' nationally as Brexit seems to be the 'go-to' excuse for every issue in the Country. Upon saying that, looking at both what we do as an agent, and chatting with my fellow property professionals in Reading, the market has certainly changed for both buyers and sellers alike (be they Reading buy to let landlords, Reading first time buyers or Reading owner occupiers looking to make the move up the Reading property ladder).
Reading House Values are 2.21% lower than a year ago, and the rents Reading tenants have to pay are 1.5% higher than a year ago
When we compare little old Reading to the national picture, national property values have risen by 0.4% compared to last month and risen by 3.0% compared to a year ago, and this will surprise you even more, as nationally, property values are 19.8% higher than January 2015 (compared to 11.4% higher in the EU in the same time frame).
However, if we look further back...
Since 2006, Reading House Values are 69.5% higher, yet the rents Reading tenants have had to pay for their Reading rental property are 26.4% higher
...which sounds a lot, yet UK inflation in those 12 years has been 42%, meaning Reading tenants are 15.6% better off in 'real spending power terms'.
Looking at the graph, the rental changes have been much gentler than the roller coaster ride of property values. I particularly want to bring to your attention the dip in Reading house values (in red) in the years of 2008 and 2009... yet as Reading property values started to rise after the summer of 2009, see how Reading rents dipped 6/12 months later (the yellow bars)... Fascinating!
So, we have a win for tenants and a win for the homeowners, as they are also happy due to the increase in the value of their Reading property.
However, maybe an even more interesting point is for the long-term Reading buy to let landlords. The performance of Reading rental income vs Reading house values has seen the resultant yields drop over time (if house prices rise quicker than rents - yields drop).
Whilst, it's true Reading landlords have benefited from decent capital growth over the last decade - with the new tax rules for landlords - now more than ever, it's so important to maximise one's yields to ensure the long term health of your Reading buy to let portfolio. More and more I am sitting down with both Reading landlords of mine and landlords of other agents who might not be trained in these skills - to carry out an MOT style check on their Reading portfolio, to ensure your investment will meet your future needs of capital growth and income.
If you don't want to miss out on such a MOT check up, drop me a line - what have you got to lose? 30 minutes of time against peace of mind - the choice is yours.