Lincolnshire’s Property Boom: Can It Continue?

Lincolnshire’s Property Boom: Can It Continue?

By Andy Price of Coversure Grantham

Lincolnshire’s property market has seen frenzied growth over the past couple of years.

While lockdown paralysed much of the UK’s housing market, in 2020 Lincolnshire saw double-digit increases with prices rising by an average of over £22,000 according to the Zoopla.

This surge has continued into 2021 with the latest data suggesting a further 10% rise, 2% higher than the UK average.  Rental properties have also performed well with landlords enjoying rent rises as demand continues to significantly outstrip supply.

Welcome as this explosion in activity is, some are beginning to question whether it’s sustainable or even desirable.  The beginning of the winding down of the stamp duty holiday saw house prices nationally dip by 0.5% in June according to the Halifax, though the authors were quick to point out that demand is still strong and that as the economy continues to improve so the market should remain buoyant.

To get an insight into the state of the Lincolnshire property market and what may happen next, local property insurance expert Andy Price of Coversure Grantham shares his thoughts with Chamber members.

Andy is optimistic regarding the county’s property market’s future but sees significant changes ahead especially for landlords.

What’s Caused Lincolnshire’s Property Boom?

I’ve been working in insurance since 2005 and in all that time I can honestly say I’ve never seen so much interest in property cover.  Be it home or landlord insurance, demand has been amazing and is showing no real signs of weakening.  It’s been an extraordinary time and I think it’s been fuelled by the following factors:

Pent-Up Pandemic Demand – while our county fared better than most in terms of lockdown property moves, things were stifled.

When restrictions were lifted in September there was a surge in demand with much of it coming from pandemic-stricken city dwellers seeking country and coastal living.

Stamp Duty Holiday – there’s no doubt that the stamp duty holiday has driven much of the growth in the housing market. For first time buyers it’s made things easier to raise a deposit as they don’t have to pay tax on top of their purchase

Similarly, homeowners  who’ve been considering a move for some time have been prompted into action at the prospect of not having to pay thousands of pounds to the government.  Its telling that as soon as the scheme started to wind down that prices took their first dip in months.

Shortage of Properties – the pandemic did more than stop people moving, it stopped people building. Land deals were delayed, building sites were locked down and materials weren’t shipped owing to closed borders.  This latter issue is plaguing us still as global supply chains have struggled to get back to normal.  Ask a builder to do some work for you and you’re likely to find they’re willing but are being held back by a lack of supplies.

Even before the pandemic hit, Lincolnshire had a housing shortage.  The Central Lincolnshire Local Plan has identified a requirement for approximately 1,323 dwellings per annum as being needed between 2020 and 2044.  This reflects the national shortage.  Home.co.uk figures show that total stock levels of property for sale in England and Wales fell to a new low in 2021 of 273,531, 34.6% lower than in June 2020 and 43.4% less than in June 2018.  The government has pledged a £20bn house building programme, but this will take months if not years to come to fruition and so a lack of supply is likely to dog the market for some time to come.

Lincolnshire’s Population Growth – the county’s population stood at 1m in 2019, a rise of 125k or 12.9% on 2002. In the wake of the pandemic we can expect to see that pace of growth quicken significantly and, in all probability, reverse Lincolnshire’s trend of having an older than average population.  This will exert further pressures on housing stocks and fuel demand for rental properties in particular.

Lincolnshire’s Economic Growth – the county has recovered well post-COVID-19, growing by 2.2% In April, 2.4% in May and 0.8% in June according to the County Council. While there is a lot of ground to be made up, the fact that there are 80,000 unfilled vacancies in the county tells you quite how much opportunity is out there.  This potential will inevitably attract investment and new people to Lincolnshire and so keep the housing market buoyant.

Five miniature red houses from a Monopoly game in a row on wooden table

Will Lincolnshire’s Housing Boom Continue?

This is a question that a lot of people are asking.  On the one hand a lack of supply and increasing demand suggests that it will.  On the other hand, if prices and rents continue to soar then all but the most affluent will be priced out of the market and we’ll face a London-style crisis whereby property is unaffordable and the market stalls and falls.  Personally, I don’t see that happening.  The reintroduction of stamp duty in October will help cool things and the local housebuilding charge will help offset supply issues.

What I do think will happen is that we’ll see some big changes in the nature of our housing market.  When it comes to rental properties this is already happening.  A Nottingham Building Society survey in June showed that 20% of buy-to-let landlords were looking to sell up.

Citing tax changes, increased bureaucracy and the chance to cash in at the top of the market, many hobbyist landlords are calling it a day.  Their place is increasingly being taken by landlords who have a portfolio of properties and who are in it for the long-term.  This will mean a more stable rental sector, something I think we can all welcome.

The other big change will be in terms of property usage.  A lot of our commercial landlord insurance customers – those with shops and offices – are looking to convert their holdings to residential use.  In the wake of the pandemic more and more people are working remotely and businesses are questioning the need for offices and retail spaces.

With demand for commercial property down and residential soaring it’s no surprise that landlords are making the switch.  John Lewis recently announced their intention to create 7,000 rental properties from its closing stores as part of a planned 10,000 flat development.

Lincolnshire: A New Golden Age?

With people flocking to the county, centralised economic planning, Brexit uncertainty finally behind us and a booming property market, I believe Lincolnshire is in for a new golden age.  The county has so much to offer and so much potential and I’ve always felt, to use the marketers’ term – that its brand was underexposed.  The changes the pandemic have brought should reverse this and I’m looking forward to seeing the county flourish.

Andy Price
Managing Director, Coversure Grantham
Connect with Andy via LinkedIn

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