Every month, Agent Wow takes a look at the biggest news stories making the property headlines and asks some leading names in the industry their thoughts on the way the property market is shaping up.
A Greater Manchester suburb has been hailed a UK property hotspot, whilst prices decline in the capital, and student property takes on a new luxury feel – what do the experts think about some of the property news hitting the headlines in recent weeks…
Bury named UK property hotspot
It’s no secret that property hotspots are moving out of the capital and the south east and heading north.
With the promise of a northern powerhouse and many big corporations increasing their presence in the north, Manchester is now hailed as a property hotspot.
Though, as property prices continue to rise in the city centre and its immediate vicinity, property booms are spilling into the suburbs.
This month the town of Bury, which lies some eight miles to the northwest of Manchester, was given the accolade of being one of the UK’s leading hotspots.
Figures from the Land Registry show the average house price in Bury has risen from £150,148 last year to £169,750 this year, a 13.1% increase, making it the sixth biggest area of property rises in the country.
Agent Wow asked Tim Wright, co-founder and product director of KeyAgent, innovators in property marketing, his thoughts on northern areas like Bury becoming the UK’s new property hotspots.
“It’s great to see markets all over the UK getting stronger, especially smaller areas like Bury. Having a strong northern housing market only improves the strength of the UK property market,” said Tim Wright.
“We talk to agents who use our app, PropertyBOX, all the time and they tell us that with a little innovative thinking and the right software, they can completely overhaul their customer service and as a result, their business. That kind of attitude isn’t geo-specific. It’s just as relevant in smaller towns as bigger cities. The announcement of Bury as the UK’s property hotspot demonstrates this atmosphere of innovation perfectly,” Wright added.
Babek Ismayil, CEO of the property technology company OneDome, shared his opinions of the rise of northern property hotspots in the UK with Agent Wow.
“While prices in many areas in south and London are flat or down, parts of the north continue to rise where demand outstrips supply. A very good example of this is in Manchester.
“A vital part of the Conservative’s Northern Powerhouse plan, the city has in recent years experienced significant regeneration works. It also has two major universities, two world famous football teams, a massive shopping centre, and MediaCity UK in next door Salford. All of which have contributed towards more jobs, greater investment and improved transport connections. And for more speculative investors, on the very distant horizon is HS2 – planned for 2033.
“As such, it’s unsurprising commutable towns such as Bury are seeing house prices rise due their proximity to Manchester’s resurgent economy. Bury in particular appeals to young families and commuters, while there are good transport links, plenty of schools, and lots of local restaurants and bars,” said Babek Ismayil.
Price growth in London slows
Meanwhile, in London, recent figures from Hometrack show the London property market has hit its slowest in eight years.
Agent Wow asked KeyAgent’s Tim Wright when he thought the property market will pick up again.
“After so many years of high growth in the London market, I think a slowing in recent months has been expected. In the short term, we’re expecting it to remain flat – unless there are any macro-economic changes, either in the UK or across the pond,” said Wright.
OneDome’s Babek Ismayil spoke of how demand from foreign buyers has massively contributed to significant price rises in the Central London property market.
“Many of those investors are from rich oil producing countries, such as UAE and Russia. However, demand from these buyers has likely fallen due to the price of oil dropping from around $110 a few years ago to $50 per barrel. These buyers have also been affected by the increase in stamp duty, with properties over £925K particularly hit. So, there is certainly a connection between the London prime market cooling and oil prices falling and stamp duty rising,” said Babek.
OneDome’s CEO talked about Brexit and how the slowing of economic growth in the UK has also impacted London house prices in general.
“Brexit is likely contributing to this economic slowdown and denting the confidence of potential property investors and homebuyers in the process,” Babek told us.
“Confidence is vital in terms of people feeling they can safely invest in property – be it for a home to live in or for a buy to let to rent out. In short, will the fallout of Brexit see companies leaving London and taking many of their jobs with them? If these businesses do, will homebuyers be able afford their mortgage and will tenants be able to pay their rent? Landlords also need to contend with the rise in stamp duty and stricter lending rules for buy-to-let mortgages.
“Until the uncertainty around Brexit and the economy is to some extent cleared up, prices in the capital may continue to slow down. Those selling in London and hoping to profit from house price rises are likely to be met with buyers offering below asking price. However, those looking to enter the property market may be encouraged by the slowing of the market in the capital as prices have outstripped inflation for a long time,” Babek Ismayil added.
Student housing is a ‘bubble in waiting…”
Property hotspots asides, other pressing property news this month was related to the future of student housing in Britain. The Telegraph ran with the headline, ‘Student housing may be a property bubble in waiting.’
Old-fashioned ‘student digs’, comprising of a desk, bed, wardrobe and little more, are being replaced with increasingly expensive, more luxurious student property, pricing many students, and student landlords for that matter, out of the market.
As Tim Wright said:
“We’re now starting to see the impact of the increase in tuition fees and rising costs of university life, as the number of students at university reduced for the first time in a long time.
“At the same time, more restrictions are coming in from landlords. Buy-to-let mortgages are now harder to obtain, so it’s likely that the number of landlords with buy-to-let student properties is about to go on the decline.”
Stay poised for our news round-up next month when we’ll be asking some more leading figures within the industry their perspectives on the property headlines.