In our previous blog post, I addressed how property prices in industry-specific locations may fall 1 to 3%. In this instalment, I’ll be covering how I believe property prices may fare over the next 18 months in specific areas across the UK where the majority of our clients are based. If you live in any other areas outwith the ones highlighted below, then don’t hesitate to get in touch directly and I’ll happily share my thoughts and insights directly with you on property in your particular location.
Inner and Outer London and the Home Counties
Sky News is monitoring the list of industries affected by the Pandemic and so far, those industries operating in The City of London have escaped which is good news for the property market. The Square Mile is home to 500,000 workers from various industries, the bulk of whom work in Professional Services, Finance, and I.T. Up until March 23rd, most living outside of London commuted in and out of The Square Mile and Canary Wharf on a daily basis, which was likely a major stress factor. Now that the stress of a daily commute has for the most part been relieved, those workers have managed to unwind due to the work-from-home option, with anecdotally few being made redundant or actually even furloughed.
With yesterday’s BBC Report claiming that fifty of the biggest UK employers have said they have no plans to return all staff to the office full-time in the near future, then City Workers may experience unprecedented flexibility with their work and living arrangements. Those in flats without gardens are sizing up their next move and those in terraced properties are eyeing larger properties in the boroughs and home counties.
According to Rightmove, increase in demand is currently outstripping supply right across the UK, and with savings replenished from decreased spending during lockdown and an appetite to find a better place to live and enjoy life in case there is another lockdown, I expect to see the property market in and around London experience a mini boom with prices rising between 1 and 4%.
Young professionals with increased savings and looking to benefit from the stamp duty holiday will lead the charge and should be able to buy properties from those looking to upsize.
Help to Buy Scheme may actually stunt the market
Note that I say should. Although the UK Government has established the Help to Buy scheme, it may not prove very helpful to those who bought properties 3 to 4 years ago and are now looking to sell. These people will struggle to sell in competition with the discounts and incentives being offered by new build developers, with the Help to Buy Scheme only covering purchases of new build properties. A prospective new build buyer only requires a 5% deposit against a more than likely 15% deposit for an existing property- the difference between finding £15,000 and £45,000 deposit on a £300,000 property! Hopefully, the UK Government may sort this out in its Autumn Statement and tweak the current scheme to include existing properties as the Scottish Government has done with its First Home Fund. If they don’t, then expect to see the prices rises mentioned above be slightly lower, as supply outstrips demand from ‘stuck’ second steppers.
In Scotland, places like Aberdeen have already suffered at the hands of the 2014 oil price drop. These areas will continue to stagnate, with prices dropping on average another 2 to 3%. On the other hand, places like St Andrews will continue to fare well price wise, as the demographic catered for is, on the most part, older home dwellers. It will attract downsizers from London and internationally as the currency rates still make prices there attractive. Expect to see prices in this type of area increase by around 3 to 5%.
Edinburgh and Glasgow, which are non-industry specific locations, have both continued experiencing price surges post lockdown and I expect the price rises to remain consistent at around 3 to 5% in each of the next two years.
General non-industry specific locations
If you live in a non -industry specific location, then demand should just about outstrip supply meaning prices should rise between 1 to 3% a year for the next 2 years.
In short, similar to how certain areas have been placed back in Lockdown, I think we’ll witness specific Property ‘Lockdowns’ due to industry redundancies, which will result in price drops.
If you’re worried that your location is likely to suffer property price reductions over the coming couple of years, ask yourself these questions:
- Do I live in a location which serves a specific industry or industries which has been affected badly by the pandemic, in particular travel, energy, manufacturing or automotive?
- Does the main earner in my household work in one of these industries?
Help is at hand
At The Property Angel, we care about you. If you have any questions or concerns, you’d like to discuss, just Ask the Angel and we’ll provide support and guidance during this time.
If you are in a potential Property Price Lockdown Area, it’s likely that you’re going to be in for a rough ride over the next couple of years. If you’re considering moving home and uncertain of what to do, I’m more than happy to jump on a free zoom call with you for 30 mins and have a chat through your options. Just visit ThePropertyAngel.com or get in touch at [email protected].
If you don’t live in an potential Property Price Lockdown Area and are thinking of moving and want some guidance about what to do next, who to speak to and where to look, then likewise, I’m always happy to jump on a free zoom call with you for 30 mins and have a chat through your options. Just get in touch at [email protected].
I look forward to hearing from you.
Founder & CEO, The Property Angel.