The Dorset Property Market: What Does 2020 Hold?
2019 has been another good year to be a property owner in Dorset. Despite the continuing uncertainty over what Brexit and a slowing in the property market nationally, our beautiful county has continued to see prices rise.
Bournemouth has seen prices rise by 3.73% in the last 12 months and across the county in Weymouth values have also gone up, rising by 1.09%. These increases chime with Coversure Poole and Coversure Weymouth’s experience as we’ve seen a steady rise in demand for both landlord insurance and home insurance quotes in 2019.
So, what does 2020 have in store for the Dorset? Well here’s Coversure Poole’s – Bournemouth’s leading independent property insurance brokers – take on the shape of things to come…
Dorset’s Housing Market and Brexit
Ask any property expert what’s been the biggest factor in the UK’s property market over the last 3 and half years and their answer will be Brexit. Hopefully the general election on the 12th will facilitate an end to this uncertainty and that could be good news for property owners. KPMG predicts that if we leave with a deal then we could see 1.3% growth in the market as a whole – something that’s really good news for an already buoyant market like ours.
Rental Market Boom To Continue?
Local landlords have enjoyed excellent returns in 2019 as demand for rentals continues to rise. The average rent is now over £1,350 per month – a 5% increase on 2018 – and it’s a trend that looks set to continue given the scarcity of affordable housing. Despite the tax changes in 2016, Which? Recently reported that buy-to-let could still be a good long-term investment, so we can expect more growth here.
Interest Rate Cut In 2020?
The latest talk around the Monetary Policy Committee table was not of a rise in interest rates, but a further cut. 2 of the 9 members pushed for a cut fearing the impact of a hard or no-deal Brexit. Lower rates obviously mean cheaper mortgages and that’s good for both homeowners and landlords.
Post-Election Boom?
In contrast to the elections post 2010 when cuts and austerity were all that was promised, the parties are now acting like lottery winners and promising to spend, spend, spend. The Tories have pledged to invest £22bn a year in public spending – including in social housing – while Labour’s plans are even more ambitious. Such vast injections of cash could create jobs, stimulate private investment, see the promise of 300,000 new homes a year come true and allow more people to access the housing market.
Housing Shortage Continues
There’s been a chronic shortage of housing supply and Dorset has been hard hit by this. In 2017 Councillor Graham Carr-Jones said, ‘We are facing major housing shortages with demand outstripping supply.’ The Council has pledged 20,000 new homes by 2033 – 1,176 a year. While this plan has to be welcomed it will take years to have an impact.
Dorset Population Growth
ONS figures show that the county’s population has grown from 389,000 to 428,000 since 2000 – a rise of 10%.
Experts predict that the rate of growth will increase as more of our aging population retires here and as younger people flock to towns like Bournemouth which has been named as one of the top 36 places to start a business in the UK. These new people will all need somewhere to live!
The Dorset Property Market 2020 – More Good Things To Come?
There’s no doubt that there’s reason for optimism in the Dorset property market. Demand has proved resilient in 2019 and if Brexit can be resolved amicably then we can expect the number of transactions to rise and see prices rise too. Roll on 2020, I say…!
John Palmer
Managing Director
Coversure Poole and Coversure Weymouth