Category: property market news

what would brexit mean to the 9,800 property owners in didsbury?

At the time of writing, a £10 bet on the good people of the UK voting to leave the EU would yield a profit of £22.50, whereas the same bet on staying-in would return just £3.30. For those of you who don’t regularly have a flutter, that means the likelihood of Brexit is very slim. But then again that’s what the pollsters and bookies said about a Tory majority at the last election.

So if we believe the bookies, it seems the most likely impact of this referendum on the Didsbury property market will be fairly negligible. There could be some mild economic uncertainty followed by a return to business as usual following a vote to stay in. In fact, even this mild uncertainty will come to be seen as nothing compared with the rush to snap up buy-to-let properties before the April 2016 stamp duty hike and subsequent flood of properties onto the rental market.

But what would an ‘out’ vote mean for the 9,800 homeowners of Didsbury or even the landlords of the 7,308 private rented properties? Well we think it all comes down to how reliant each local market is on buyers who work in the financial services industry. Some commentators claim that in the event of Brexit, the large global banks could pull out of the UK and relocate to somewhere within the EU, most likely Frankfurt. That would result in an exodus of relatively high income workers from the market, and it is these people who have been instrumental in putting upward pressure on house prices since the 1980’s.As we all know, people working in financial services are mainly concentrated in South East England, within commuting distance to the City of London and Canary Wharf. However, there are also provincial outposts in the north of England, particularly in Leeds.

In Didsbury, there are 1,247 people working in financial services, equal to 4.7% of all jobs. In the context of the national picture, that puts it in the top half of all areas in terms of the concentration of financial services jobs. So the bottom line is that in relative terms, Didsbury is fairly reliant on the financial services industry. Consequently, Didsbury’s property market would be moderately exposed in the event of Brexit.However, there is a broader economic consequence of Brexit which would pose a menace to the M20 and UK housing markets – interest rate rises.

Theoretically, this could see the cost of mortgages grow swiftly, pricing many out of the market and generally making life difficult for buyers. However most buyers take fixed rate mortgages and two-thirds of landlords buy without a mortgage, so this would dampen the effects in the short-term. It’s also conceivable that inflation would ramp up substantially if the price of imports went up, and if the Bank of England responded by increasing interest rates we might get into the situation we were in in the late 1980’s when mortgages were sky high, but inflation was eroding the debt.

So in reality, if we really knew what was going to happen, we wouldn’t be agents in Didsbury, but City wizz kids earning billions.  But what we can say is that you should make your own decision on the 23rd of June 2016 safe in knowledge that whatever the result, there will always be threats but also opportunities that the savvy homebuyer can take advantage of.

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average didsbury prices for flats up 13.4% last year

Didsbury homeowners and buy-to-let landlords in M20 should be pleased to know that prices have risen recently.

Our latest analysis of the Didsbury property market shows that month-on-month, M20 prices for flats have increased by 2.7%, whilst the year-on-year figures showed that prices for flats in M20 have increased by 13.4% in the year, taking the average price for flats in the Didsbury area to £198,600.

It gets even more interesting when we look at the last few months of 2015 and see the patterns that seem to be emerging.

• December 2015 – a rise of 2.7%

• November 2015 – no change

• October 2015 – a rise of 2.7%

• September 2015 – a rise of 3.3%

The lack of new building developments has been the biggest factor contributing to the M20 property values being 8% higher compared to 2009, and an eye watering 283% higher than in 1995.

Until the Government addresses this issue nationally, and allows more properties to be built, things will continue to get worse. The UK population grows at just under 500,000 people a year, whilst the country is only building 152,400 properties a year – no wonder demand is outstripping supply. When one looks at the local picture in M20, between the last two census’, the population in M20 grew by 5,900 people a year, yet the number of properties built was only 2,300.

We firmly believe the property market in M20 (and the country as a whole) is changing its attitude towards homeownership, which in turn will have major ramifications for the homeowners and buy-to-let landlords of M20 alike. Back in the late 20th century, getting on the property ladder was everything. However, since the late 1990’s, we as a country (in particular, the younger generation of would-be homeowners) have slowly started to change their attitude to homeownership. We are moving to a more European model, where people choose to rent in their 20’s and 30’s (meaning they can move freely and not be tied to a property), then inherit money in their 50’s when their property owning parents pass away, allowing them to buy property themselves.

Some of the highest levels of home ownership are in Romania at 96.1%, Hungary at 88.2% and Latvia at 80.9% (hardly European economic powerhouses). In Western Europe, Spain has homeownership levels at 78.8% and Greece has 74.0% (and we know the economic woes of these countries well). At the other end of the scale, whilst we in the UK stand at 64.8% homeownership (and interestingly in Didsbury is 48%), in Europe’s powerhouses, only 52.5% of Germans and 44.0% of Swiss people are homeowners.

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sales levels in didsbury have increased

The number of sales in a given area is a powerful measure of the buoyancy of local housing markets. There were a total of 938 transactions in M20 in the last calendar year. This is an increase of 46.8% over the year. In comparison, there was an increase of 35.2% in the North West, and an increase of 29.4% across England & Wales.

 

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resident jobs mix

In M20, the largest proportion of residents (36.8%) are of ‘Professional occupations’ (Prof.). This is 20.4% higher than the average in the North West. Next most common in M20, with 16.2% of all residents, are ‘Associate professional and technical occupations’ (Technical). This is 4.7% higher than the average in the North West.

 

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turnover in the context of the bigger picture

Sales as a percentage of total housing stock available is a useful measure of an area’s turnover. Of the total private stock in M20, 4.5% of properties changed hands in the last calendar year. This is 0.7% more than in the North West, where the turnover was 3.8%, and 0.4% more than the whole of England & Wales (4.1%).

 

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