As we approach 2017, our network of property finders give their views on recent trends in the UK property market and look ahead to next year.
The year to September 2016 saw UK house prices rise by 7.7% to reach a national average of £218,000; up £16,000 on the same time last year.
Despite a slight pause in activity post-Brexit and continuing uncertainty, most experts are predicting positive price growth in 2017; albeit slower than in recent years.
The main reasons for increasing market prices remain. The supply of available property in the most sought-after locations does not meet the demand made possible by the availability of cheap mortgages, and only 195,000 new properties have been built in the UK in the last 12 months, compared with the government’s minimum requirement of 250,000,
However despite national media headlines, it should be remembered that the housing shortage is mainly in the south-east, with a current shortage of 70,000 homes in London in particular.
That said, in the south-east of England, over 69% of estate agents surveyed last month still thought that asking prices were too high.
The other main factor to consider is the changing demographics in the UK, which have a far greater impact in some areas than anything else. For example, entry into the market is very difficult, with the average age of first time buyers well over 30. At the other end of the spectrum it is estimated that 90,000 people a year (termed ‘last time buyers’) would like to downsize to a smaller property. More people are now also choosing to rent. Whereas five years ago, 65% of 30 year olds were buying a property, now it is only 45%.
The challenge for the government, who prefer people to purchase rather than rent, is to make it easier for first-time buyers to enter the market at a time when there is no sign of prices falling.
In terms of market predictions for 2017, it does vary quite a lot from region to region and even quite locally. We’ve taken predictions from our experienced property finders across the UK and you can read on below for some fascinating insights into their expected hottest spots for 2017.
Our local agent for Devon & Cornwall finds that despite the new stamp duty laws, Brexit uncertainty and a slowdown in the London market, demand in Devon and Cornwall has remained, provided properties are sensibly priced.
And the ‘Poldark effect’ has certainly seen renewed interest in West Cornwall, with filming having begun on the third series. Towns such as St. Ives have benefited from this beautiful area being screened every Sunday evening on national TV, and with rumours of a possible fourth and fifth series, this area could be in demand well into 2017 and beyond.
Our local agent of the North-West office believes the focus for growth there will continue to be on the Liverpool – Chester – Crewe – Manchester area as developments around the Northern Powerhouse, Liverpool Two and HS2 start to gather momentum.
Manchester is already offering some of the highest rental yields in the country for investors and that looks set to continue with some exciting new apartment developments in the pipeline.
Our agent also predicts that the attractive market towns of Cheshire, such as Knutsford and Nantwich will always be in demand for families looking to combine ease of access to employment with great schooling and a high quality of life. And they believes that Chester could be the place to be for 2017 with the opening of its new theatre complex in the Spring, and the accolade of being recently named as one of the top two places to live in the UK by the 2016 Hot Housing Index.
In East Anglia, our local agent, believes that property prices will hold across the region in 2017, with minimal if any negative movement in any sector, and that the market for low to medium budget property in Cambridge (£250k-£800k) is likely to remain the most robust of all sectors, as is the city’s rental market; driven by new and expanding businesses.
Again, the post-Brexit landscape is having some effect, with the possibility that large country houses may struggle to find buyers, and that demand for second homes in North Norfolk and East Suffolk will remain low, with holiday bolt holes possibly being seen as an unnecessary luxury since the increase in stamp duty on second homes.
In the prime hubs of Cambridge and Norwich, demand remains reasonably strong and Andreas thinks prices will continue to rise in line with the UK average, driven by limited stock of good quality property.
In the rural areas of Suffolk and North Essex, Andreas expects that period houses and barn conversions will continue to enjoy their perennial popularity from the Easter buying season, and in Hertfordshire, the rail connections to London will continue to shore up the price of any good property within reasonable driving distance of a direct station link. Despite this, he believes availability will be the issue, with properties hard to find in a limited market.
Our local agent for Oxfordshire & The Cotswolds, believes that the demand for property there will continue to grow, following the great improvement in transport links to London, and finds that more people are now considering basing their main home in the country and commuting into London or retaining something smaller there.
He considers that hotspots in the area for 2017 are the villages within access of both Banbury and Oxford Parkway stations, and in the last 12 months, any village within 15 minutes’ drive of Soho Farmhouse – close to The Tews, Charlbury and the ever popular Chipping Norton.
And many estate agents in the know are now seeking out period properties for themselves in the beautiful villages between Banbury and Shipston on Stour, Brailes, Stourton and Hook Norton, which offer great value in comparison to some of the more established Cotswold hotspots.
Banbury is now only an hour from London, and that also opens up the charming villages of Deddington, Bloxham, Aynhoe, Helmdon and other excellent villages around Brackley.
Our local agent for Surrey & Kent, is certain that Royal Tunbridge Wells and all locations close to it will continue to be a property hotspot in 2017,. This is fuelled in part by the long awaited and nearly completed dualling of the A21 trunk road and other improvements, just to the north of the town; giving even better access to the M25/M26/M20, London, Heathrow and Gatwick Airports, as well as the Channel Ports, along with good rail access.
In Scotland, our local agent believes that house prices are likely to remain static during 2017, with any potential gains being countered by uncertainty over plans for Brexit, or indeed a potential challenge to Brexit from the Scottish government. In recent years, house prices in Aberdeen have fallen due to the downturn in the oil industry there, and our agent’s hot tip is that now should be a good time to buy in Aberdeen before the oil industry bounces back and is followed by rising house prices again.
So, while Brexit uncertainty is having some effect, it looks like prices are, at the very least, holding steady in most areas. There are still bargains to be had, and plenty of hotspots to jump on in some beautiful parts of the country.
With good properties in short supply, and more deals being done “off-market” that is all the more reason to consider using an experienced property to help you find your dream home in 2017 and to secure it for the best possible price.
For more information about how we can help you, please contact us or call 0330 223 6339