Despite initial consternation surrounding the economic impact of activating Article 50 to begin the process of leaving the European Union, house prices and other economic performance indicators have been positive with GDP and productivity increasing. House building has been strong too, whilst off-plan property has seen a large influx of foreign investment looking to take advantage of the relative weakness of the Sterling. Landlords have so far been having a good year despite a number of interventions from the treasury recently regarding stamp duty and tax breaks.
Here we’ll take a look at some of the biggest stories from the property world over the last week.
House sales reach 10 year high
Data from NAEA Propertymark indicates that agreed house sales reached a ten year high in February. 74% of these were below the original asking price, suggesting sellers are becoming more realistic when it comes to property transactions. This represents excellent news for landlords looking to expand their portfolios after the new tax year begins later this month.
The data said that average sales rose to 11 per branch for estate agents, a high not seen since September 2007. This is a rise from eight per branch in January this year.
The number of properties available to buy on estate agents’ books increased from 38 in January to an average of 44 in February. This figure has increased by 26% from last February when agents had just 35 properties available per branch.
Landlords looking to expand portfolios may be well advised to start the process following the new tax year as prices hit more realistic proportions. Rental income and yields remain very strong.
Lloyds report indicates relationship between employment and house prices
Lloyds Bank released a report recently indicating that there is a direct correlation between house prices and employment levels in areas across the country. It said that the areas of the UK which have experienced the highest growth in employment have experienced above average price growth almost proportionally to unemployment decreases.
The analysis also found that the 10 areas with the highest unemployment rates recorded average house price growth of just 10%, less than half the national average (25%), since 2007. The 20 areas that recorded the sharpest falls in unemployment have seen average house price rises of almost double the national average over the past decade. The ten areas with the biggest unemployment declines have seen an even larger house price rise, averaging 53%, between 2007 and 2017.
The fact that many of the top 20 areas are in the North West provides striking insight for landlords and property investors wondering where to make their next property investment. Investing in Northern cities such as Manchester or Liverpool would provide a significant step-up on the competition.
The housing market on the whole has been performing extremely well, and these reports add to the number of voices now agreeing that property in the UK could well be about to experience a bumper year in 2017.