Friday, 22 April 2011
Light at end of the tunnel
There has been a survey done by Liverpool Victoria Insurance Company , picked up by the Newcastle Journal as well as some of the National Newspapers (the Mirror) . Student numbers are going to fall, and Newcastle will be one of the most affected places, with student numbers falling by 50%. Many people think this is a bad thing because property values will fall.
A friend has recently sold a house in Larkspur Terrace. When Estate Agents were looking at it with a view to putting it on the market, they valued it solely as a price/bedroom. It is in an area with a large number of rented properties. The Estate Agents thought there was no point in marketing it to anyone other than as a property to be rented to students, just emphasising one of the problems of studentification - that houses become unattractive to non-students, thereby contributing to the further imbalance in the community.
Is the survey says nothing about the value of houses. So what will happen ?
A house has a value other than financial ( which may be reflected in the price it can attract) - just look at housing and school catchment areas. What will reducing the number of students in Newcastle do to Jesmond.
There could be an excess of properties to rent. Will students still pay a premium to live in Jesmond, or will they still live more peripherally and pay less rent?
For some students, parents have bought houses for their children to live in whilst students. As house prices continue to slowly decline, it cannot be a guaranteed investment for parents who may have been looking to make a profit on the capital.
The most promising part of this is that if residents can expect no further studentification, the exodus of residents may slow.
If houses aren't bought up as buy-to-let by absentee landlords, they may be bought by year-round residents. As buy-to-let properties tend to be at the lower end of the price range, young families and your professionals could move back into the area, as they are no longer priced out.
Posted by Medalto at 09:03