I realise it’s been some time since I’ve written a market insight episode so felt it about time to do so. In the midst of the dreaded ‘B’ word, I have spoken with a number of landlords and homeowners, and I think to use the term ‘quietly cautious’ would be a fair representation which is to be expected with economic uncertainty. That being said, I’ve compared various indexes which makes for some interesting reading.
The Halifax House Price Index reported an annual increase of 0.8% in property prices from this time last year (average UK property price currently £223,691). A similar story can be seen in the Nationwide Index which showed an annual increase of only 0.1% (standing at £211,966). Given the lack of growth in UK property prices, and some of the data sets in the graphs below, could have some using an entirely different ‘B’ word.
So what is to be expected over the next few months? Well RICS in their index have quite frankly presented some bleak findings, the headline reading “Near term sentiment continues to deteriorate”. Slightly more local (Yorkshire and the Humber), this is echoed in the data and graphs below (taken from the RICS Jan 2019 index) showing number of vendors instructing agents to sell their properties (down 17.5% as a three-month rolling average as well as buyer enquiries (down 5% over the last three months).
Furthermore, RICS data and graphs below show that regional sales and price expectations will drop over the next three months which, as leading indicators, would make sense i.e. less buyer enquiries meaning more of a buyers market.
So it’s all doom and gloom for the UK property market… Or is it? Well not everywhere if for example we look at this on a more insular level with the York property market in mind. According to the latest Land Registry data, the average price in York stood at £252,138, an uplift of 3.75% from 12 months prior and significantly outperformed the rest of the UK. The strongest value uplift was in the York terraced home at an increase 4.87%. This same property demographic constituted a substantial 29.12% of York properties which sold within the last 12 months.
What we can surmise is that there is still money to be made in the property market but now more than ever, with economic factors taking hold, certain areas of the UK will feel the pinch far greater but York as an area, continues to provide long-term sustainable growth.
This will certainly be some of the toughest years for Letting and Estate Agents with the impending Tenant Fee Ban, Brexit and in my opinion, the ones which will weather the storm are those who can adapt to change e.g. providing sound investment advice to their landlords and provide the best value to their vendors to maximise their client’s sales price. The so called ‘cheap-fee agent’ will be the one to struggle the most (and even stay in business) in this current market and knowing your local area is more crucial than ever.