2014 was a busy year in the Cambridge property market. Although widely regarded as a year of two halves (January to June being somewhat more frantic) we did see a rise in activity and a return to form around December. In what is traditionally a quieter time in our industry we experienced excellent activity, with several sales being agreed during the Christmas week and two on Christmas Eve!
Mortgage availability continued to improve throughout the year, as did buyer demand, so it is no wonder that the city saw a 12.1% growth in property prices last year, with the average sale price rising above £400,000 for the first time to £404,085. Cambridgeshire as a whole also saw a rise in property prices, up by 5.1%.
The reform of the Stamp Duty Land Tax (SDLT) system, effective from 4 December 2014, provided an instant boost to sales. In fact, the majority of buyers will be better off under the new system with the tipping point being £937,000. Based on 2014 sale prices, the average saving on Stamp Duty in Cambridgeshire would be £1,236.
The reform will be particularly important for first time buyers, who can often struggle with buying costs. The average price paid for a home by first time buyers in Cambridge was £208,026 – 11.5% more in November 2014 compared to the previous year. Mortgage funding advanced to first time buyers in November 2014 also increased, up 6% on the November 2013 figure. So, with less SDLT pressure, greater mortgage availability and approvals, we may start to see the pressure on the bank of Mum and Dad reducing slightly.
Over the last five years smaller properties have outperformed the wider market in Cambridge. Flats and terraced houses have both seen price growth approaching 40% over the last five years, reflecting an increasing interest in smaller properties in the city. While detached and semi-detached properties have comfortably outperformed the national market, buyers have demonstrated greater enthusiasm for these smaller homes. This is possibly driven by high demand for buy-to-let opportunities, as investors often favour the perceived property hotspots smaller homes.