When Mohammad Jamei, the senior economist for the Council of Mortgage Lenders (CML) said: “The housing market appears to be, for want of a better phrase, moving sideways” we think we know what he meant.
Reports of a slowdown in the property market highlighted by figures from HMRC which show a drop of 22.5% in the number of residential property transactions between March and April this year, mean the market is not moving forward or backwards, but sort of sideways as it’s still moving.
There has certainly been a slowdown in house price rises in the South east, which is not the same as a drop and unfortunately everybody starts thinking the worst, unable to separate the ideas of a ‘slowing rise’ and a ‘drop’.
And of course, the problem with all the headlines is that the London and South East market tends to skew the numbers, which typically report average figures.
This problem is exacerbated by commentators not really taking a balanced view of how regional markets across the country are performing and concentrating on London and average figures.
The Brexit vote also triggered a slowing in prices around London and the South East, which had previously been experiencing a house price boom; but again, it’s a slowing of price rises, not a full-scale collapse.
In reality, we are witnessing growth in London being outstripped by cities such as Manchester, Birmingham and Bristol, all of which are experiencing strong economic performance, with markets driven by a need for people to move around the cities for work.
Prices will hold in London for sure, but the rate of increase will slow compared to previous years to allow wages to catch up and people are able to fund mortgages again. Rental income will be stifled for a while until with some areas of the Capital showing reductions are necessary to get tenants in, but again it will pick up as wages rise.
Signature’s experience in the North shows prices are rising at a greater rate than in previous years as buyers and investors see greater opportunities and value in buoyant markets away from the Capital bubble.
There are areas of Cheshire, Lancashire, Yorkshire, Cumbria and Northumberland seeing healthy growth in prices, although most have a very long way to go, before they come anywhere near catching up with the prices of similar properties in the South.
It is difficult to find a habitable property for sale in London for less than £100,000, whereas there are areas in the North where you can still get a couple of traditional terraced properties in fair order for that amount – or a single good quality, well-appointed property.
We are receiving an increased number of enquiries from brokers and investors, who recognise there are plenty of good value properties out there, offering good market rents if you know where to look – which they do.
What all our clients and prospective clients want, regardless of where they are in the country is low rates, high LTVs, a quick decision process and high-quality personal service. And Signature is strengthening its team to improve the service we offer, at just the right time.