‘Some three years ago critics doubted the strength of the Worcester’s residential development market which was being propped up to a notable degree by the ‘Buy to Let’ investment landlord, yet throughout 2006 new homes and apartments in Worcester achieved record-breaking prices of well over £300 per square foot. In 2007 new homes experienced a 12 – 18 per cent price inflation which, rather than deterring buyers, further increased demand. But this final steep escalation of property prices was imediately curtailed by sudden onset of the economic crises some two years ago which has shaken the foundations of the property market and which has been reflected by a drop in capital values of up to 35% in some areas.

How has this affected the residential rental market? Jonathan Sugden, a Fellow of the Association of Residential Letting Agents (ARLA) and Managing Director of one of Worcesters leading letting and management agents Simply Lets, suggested that a demand is still there, “There is little doubt that the Buy to Let investment market ended abruptly with the dramatic fall of property prices in 2008, however the stock of properties available to let has actually increased due to the needs of those unable to sell. The work place has become a harder environment in this climate and people looking for work have a need to be transient.  Some fluidity is essential to provide for movement of itinerent workers and those individuals or families who have personal needs.  When such home owners have been unable to sell they have looked to the letting market to provide a vehicle to facilitate their move”

Mr Sugden explained  “As values fell, there was initially a large influx of available property and it took some 6 months before the demand caught up, but it is evidently now a thriving market with Buy to Let landlords reconsidering their options. Whilst the levels of capital growth as seen in the boom years is not immediately likely, yeilds from property are being seen to be a better investment than money invested in the bank bearing in mind the prevailing low interest rates.  With property prices falling and repossessions increasing there are some opportunities for those who have cash investment sums to find respectable yeilds and a potential long term capital growth.”

Jonathan Sugden added “Apartment living took off in Worcester in 2002 with many of the major builders embarking on ambitious schemes of flat development through either new build or conversions of older properties. The beautiful waterside quater of Diglis, the city centre and smaller pockets of opportunity within the core city areas have all yeilded a diverse and interesting range apartments and due to the large number available, prices are suppressed. It is evident that these have recently been considered as suitable investment opportunities. Whilst apartments do have ground rents and service charges which negatively impinge on yeilds, purchased at the right price they are easy to maintain, relatively trouble free letting units which when managed correctly can retain good continuity of occupancy”.

Whether property prices now stabilise, increase or continue to suffer further slides, is uncertain. No one knows whether the Government has provided enough financial support to generate sufficient confidence to prop up the housing market on a longer term basis, but the investment market for property looks set for the time being to remain a viable option and qualified professional letting agents such as Simply Lets seem optimistic that long term investment in property is a worthy consideration.’

Article kindy authorised for publication 12/07/09