Tue 29 Oct 2019 21:45:58
The current trend in the UK housing market and particularly - Leicester.
House prices in the UK have grown moderately to 4.2% year-on-on-year due to larger cities performing well. The fastest-growing cities in the UK are Nottingham with an increase of 7.5%. The second-fastest growth is seen in Leicester with a year-on-year increase of 6.5%. The increase has a few factors to consider, both cities started at a low base, as they did not perform as well as other cities prior to 2015, therefore this gives them a higher jump than others.
Why is Leicester doing so well?
Investors are more likely to invest in cities where jobs are increasing and affordable housing is available. Leicester has seen the likes of Octopus Energy, IBM, and Hastings Direct to move their offices within Leicester. Naturally, this increases optimism and jobs within the region.
Both Nottingham & Leicester have two or more universities. This is an ideal catchment for investors. The student market for good quality apartments & HMOs are thriving and very much in demand.
Within the county, Hinckley homeowners have seen growth, with an average of £24.33 being added, adding £4,453. Other county towns to see growth include Wigston (£19.49 a day), Loughborough (£17.30 a day) and Market Harborough (£14.11 a day).
As prices are increasing, previous landlords not looking to carry on their property business due to tax implications that will start to sell. New investors are active within these areas, so these properties which require works to them to achieve higher rents are ideal to be snapped-up.
Here in the Midlands, we have a close eye on the London property market. Hometrack is forecasting that there will be similar flat-growth for the next 2-3 years for affordability pressures to work their way out of the market. Prices have been realigned to what buyers are looking to spend.
Recent interest rise - what effect does it have?
Mortgages are fairly cheap in terms of what we have experienced in the past two years. Two-thirds of mortgages are within fixed rates, it will take a couple of years to see the change take place. Meaning, interest rates will stay at a similar rate to what we have today.
Since 2004, every borrower has had a stress test to confirm their affordability, so we are seeing less failed mortgage payments.
Which cities are doing good/bad?
It has now been 10 years since the recession. How do UK cities play out in the property market today?
The cities which have the least growth in house prices are:
The factors for this are the boom and bust within the markets in Belfast. The reduction in oil price had an impact on Aberdeen and it’s house prices. Glasgow, Liverpool and Newcastle house prices are similar to what they were in 2008, these cities have had price drops continued after the recession, so even though they have increased, they have not increased to where prices have across the UK.
Looking within the county of Leicestershire, the two areas where trends are not in keeping with the rest of the county are in Coalville which prices have dropped an average of £10.31 a day, losing a total of £1,886 over the 9 months - while Melton householders have had to endure a £15.79 per day decrease in values, equating to a loss in values of £2,890.
The current cities which had the highest growth in house prices are since 2008:
Most of these cities have seen a 50% increase in house prices since 2008. Cambridge has seen an increase of 70%. This is due to a broad base of demand, strong labour markets, overseas buyers, UK investors, lack of housing and falling mortgage rates.
These cities have done so well in previous years. Although now, they are the slowest growing cities in the UK. This is because of affordability pressures and now the increase in mortgage rates. This inevitably impacts the demand in houses. Also, this massive growth needs to align with neighbouring markets.
Shonki Bros helping you purchase and sell your property.
As we are more focused on what is happening within Leicester, we aim to help homebuyers and investors by offering the right property for them to convert, live or resell. If you have a keen interest in the property market and new properties coming onto the market. Please click on this link to add your details to receive the latest properties that come on the market and latest trends happening in the areas that concern you.
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Gavinder Sangra - Director
Sources: Hometrack & Zoopla
Photo credit: Leicester Updates