As one of Surrey’s leading home and landlord insurance brokers, at Coversure Guildford we keep a close eye on the local property market.
Property prices, some say, are a barometer of the level of confidence in the overall economy. A strong performance in the housing market giving a ‘feel-good’ factor for those fortunate enough to be on the property ladder. Perhaps that explains why house prices are never far from the headlines. That’s never been truer than now when confidence appears to be falling with many predicting that, for the first-time in over a decade, we’re about to enter a period of falling house prices.
So what does the future hold for property owners in Guildford where prices have risen 7.1% over the last year? And how is the commercial property sector faring? In this latest blog from Coversure Guildford, the home of great home and landlord insurance, we explore the Surrey property market in a bid to find out, and take a look at how rising prices may impact your property insurance quotes.
What’s been happening to property prices in Guildford?
Prices have been rising. According to Zoopla, sold property price have risen by 7.1% in the last 12 months in Guildford. The average price is now £629,633, that’s 143% above the UK average. The ‘race for space’ and stamp duty holidays were key factors in the explosion of property prices over the last few years, though low borrowing rates and a fundamental lack of supply of housing have also been contributing factors. Guildford, and its surrounding towns and villages, is an area that has always been popular particularly for those wishing to move out of London and has always commanded a premium.
What’s the rental market like in Guildford?
With owner-occupier numbers higher than the national rate, the last census records showed that 73% of Surrey households owned their own home, with just over one third mortgaged. However, the boroughs with the lowest proportion of owner-occupiers were Runnymede and Guildford, where the private rented sector has been growing since 2001.
So, is renting anymore affordable than purchasing a home in Guildford? The average rent in Guildford, according to one leading rental property website, is £1,816 pcm, that’s 55% above the national average, which itself has seen an increase of 10.6% in the last year. The cause of rent rises many refer to, is the continuing trend of private landlords selling up and leaving the private rental sector due to legislative changes and rising costs.
Is Guildford a good place to own commercial property?
When it comes to commercial property, Guildford has seen good growth in this area over the last decade or so. From the Surrey Research Park supporting 140 businesses in R&D to the estimated 60 video gaming studios, the largest cluster in the UK, demand has been strong. Alongside this there are the established office and retail sectors too. However, commercial property as a sector in the UK is experiencing similar confidence worries as the residential property market. The latest RICS UK Commercial Property Monitor showed that in Q3 2022, 81% of survey responders viewed the market as in a downturn, with demand for retail and office space falling, though the industrial sector is remaining positive.
What will happen to Surrey property prices and rentals in 2023?
This is the million-dollar question that is on the lips of many Surrey homeowners, tenants, landlords and business owners alike. Following the Autumn Budget announcement earlier this month, the Office For Budget Responsibility (OBR) have revised their previously positive forecast stating that they envisage house prices to fall over the next two years. Within the commercial sector the changes in working practices and shopping habits are impacting demand. For landlords, will rising maintenance costs and anticipated rental reforms increasing their responsibilities make more consider their options?
There are certainly some uncertain times ahead. But making predictions when it comes to the property markets is never easy. While the OBR has predicted falls over the next two years, they acknowledge that the cost of borrowing may be the determining factor. We’ve seen several interest rate rises over the last few months, the rationale behind that is rising inflation being driven by rising prices. These rising prices do not just affect the properties and goods we purchase, but they can have a knock-on impact on home and landlord insurance policies too.
How do rising prices affect property and landlord insurance costs?
One key aspect that anyone with a property to insure, be that a home or business premises, needs to consider is the reinstatement value – the cost of rebuilding. Insuring assets for incorrect values, or setting cover limits too low, is likely to result in underinsurance. In a period of high inflation, should the worst happen, replacement costs and building costs are likely to be higher than expected. RebuildCostAssessment.com estimates that around 90% of commercial properties in the UK aren’t insured for the right amount and for homeowners it’s a similar figure. This means that in the event of claim, property owners could face a shortfall of tens of thousands of pounds.
What can you do to ensure your properties are adequately covered? Regular reviews of your sums insured is key and you may want to consider professional help in the form of insurer surveys or independent valuations to do that. If you’re worried about property underinsurance then please call Coversure Guildford on 339 623 and we’ll be happy to help.
What’s does the future hold for the property market in Surrey?
While we can’t give a definitive answer to that, we can see trends. Some say what we’ll see is a price correction after a period of franticness. Others that it all depends on the cost of borrowing and the availability of mortgage products. Supply will certainly be another factor, for both homebuyers and tenants. What we do know is that Guildford and its surrounding towns and villages are a great places to live and work in. The area offers so much and affords its residents and local business owners with that much desired work-life balance. It’s that great mix which we hope will keep the property market in Guildford and Surrey resilient during 2023 and beyond.
Need a home or landlord insurance quote?
Coversure Guildford is well placed to assist homeowners, landlords and commercial property owners with all their property insurance needs. If you’d like some independent advice, please call us on (01483) 339623 or email Coversure Guildford here.
Sources:
UK house prices: the latest data – Zoopla
House prices in Guildford – sold prices and estimates – Zoopla
2011 Census – Housing – Surrey-i (surreyi.gov.uk)
Home.co.uk: Guildford Market Rent Summary
HomeLet Rental Index | Average Rent UK |Rental Price Index 2020 | HomeLet Rental Index
Savills UK | Spotlight: Guildford – Driving Surrey
Global Commercial Property Monitors (rics.org)
UK house prices forecast to fall for the next two years – BBC News
Home Insurance | Cheap Home Insurance Quotes | Coversure
RebuildCostASSESSMENT.com
