The online property portal has said that, “the monthly increase in the price of property coming to market at 0.4% (+£1,086) is very similar to the 0.5% increase recorded over the same period 12 months ago.”
This represents steady going for a housing market which has resisted the political and economic ups and downs of the last year to remain a reliably growing sector. Early indicators of housing demand also remain strong according to Rightmove, with a 5% increase in traffic over the period since Boxing Day which is traditionally the time of year when people start seriously looking at moving house again after a quiet December.
The data from Rightmove indicates continued momentum in the UK housing market throughout Q4 2016 and into the New Year.
However, if this momentum is to be retained then it is clear that more houses need to be built, especially in areas which are seeing rapid population growth. It is clear that this is a priority to the government which has already announced plans for new garden towns and a new ‘Starter Homes’ initiative since the turn of the year.
But perhaps the biggest story of the year so far is the encouraging start to the year in the regions, particularly in the Northern Powerhouse cities.
Recently, the London market has seen something of a downturn. Research from Knight Frank suggests that the prime market in London dropped by 6% in 2016 – a big turn up for the books in a market that we are used to seeing dominate the housing scene.
At the same time, the central London rental market appears to be looking into some sort of abyss according to analysis from outlets such as Mortgage Strategy and Property Reporter. The rise in tenant demand has reportedly slowed by almost 30%, and just 5% of landlords who operate in London plan to expand their portfolios compared to 15% who planned additions in 2016.
All of this comes at the same time as Countrywide are reporting that rents have fallen by an average of 2.9% in London over the last year.
There was a time, a very recent time at that, when the housing market was heavily dependent on London and any declines in the capital would inevitably fan outwards and affect everywhere else. Now, however, it looks like other areas are beginning to be able to stand on their own more strongly and this is to the benefit of the market as a whole.
The rise of regional cities such as Manchester and Liverpool continues unabated, and this growing strength is set to be a defining theme of the year ahead.
The movement of people out of the capital has become a pronounced trend in recent years. Northern cities offer an exciting lifestyle which is more affordable than London. The growth of modern, creative industries in the North has only confirmed that it is the place to be for young people looking to get ahead in the world in a fashion which doesn’t break the bank - and landlords are paying attention.
The same reports which show that landlords’ interest in expanding their London portfolios is on the wane also show that landlords in Northern regions are planning to buy more. In some areas, such as the North East, the number of landlords planning to expand their holdings has doubled, up to one in five.
The gap between the supply of and demand for high quality rental accommodation in Northern cities is still large – but many are working to close it as soon as possible and give the new arrivals what they want. New developments in top cities are being launched all the time and the pipeline is growing. For example, Manchester will be the beneficiary of more than 40,000 new private rented homes in the coming years according to council planning numbers.
If the positive momentum carried over from 2016 is to be maintained, then it is vital that Northern Powerhouse cities continue to build. The appetite from property investors and potential tenants has been well proven by now and, as the London market continues to underwhelm, it is clear where the future lies.
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