January Property Market Update
One month down, eleven more to go. As we leave January many people are already calling time on a ‘cleansing period’ of sorts and gym attendances have started to dwindle. Some of you may have completed the popular start of year tradition ‘Dry January’, and to those of you that did, I tip my hat.
As far as property goes, what have we seen from the market at the start of 2017? Has it been as deserted as the bars or as resurgently busy as the gyms?
January’s property market in statistics:
- The asking price of property coming to the market has risen by 0.4% (+£1,086). This is very similar to the rise of 0.5% seen in January 2016
- In the North-West there was a 0.8% increase, meaning an overall annual change of +3.3% from January 2016
- Year on year in January the number of visits to Rightmove has increased by 5% and the number of houses for sale with two bedrooms or fewer is currently 1.9% higher than last year
- Across Great Britain asking rents were down 1.1% for the last quarter of 2016. Outside the capital, rents rose by 3% overall in 2016
- The highest rental growth according to Rightmove was recorded in the North-West with asking rents up 4.4% from £613 pcm in Q4 of 2015 to £640 pcm in Q4 of 2016
- Greater Manchester features three times in the list of top five areas in demand across the UK with Ashton-Under-Lyne, Oldham and Stockport all making the list
There was a steady increase in property prices during the first month of 2017, with asking prices seeing a rise of 0.4% (+£1,086) according to Rightmove. This is in line with January the previous year where there was a rise of 0.5% in the asking price of property.
In the North-West, an increase of 0.8% in January signified a 3.3% rise year on year. The latest Office of National Statistics (ONS) figures tell us that Manchester is one of the biggest contributors to this number. The average asking price in Manchester as of November last year was £157,688, up 9% from the £144,711 reported in November 2015. Overall the market is currently progressing consistently with previous years.
The Royal Institute of Chartered Surveyors (RICS) was not far off with its prediction of a 6% increase in the average UK house asking price for 2016. For 2017 prices are predicted to carry on rising although with the forecast slightly more cautious at 3%.
What about supply and demand? Well, what we know from Rightmove’s figures is that their website recorded an increase of 5% in the number of visits year on year in January. This is an especially notable figure considering last year’s surge in buy-to-let activity after the announcement in November 2015 that second-home stamp duty would apply from April 2016.
So there is still a very clear demand for property, what about the supply? As a result of fewer buy-to-let purchasers than this time a year ago in the midst of this announcement, the available stock of homes with two bedrooms or fewer is 1.9% higher than January 2016. This offers a unique opportunity for first-time buyers to get themselves on the market with more choice now available.
In the rental market, asking rents saw a 1.1% decrease in the last quarter of 2016, however overall for 2016 asking rents went up. Outside of London (where the level of affordability appears to have hit the ceiling), rents rose 3% last year.
The largest growth was seen in the North-West with asking rents up by 4.4%. The current average asking rent in the region is £640 per calendar month (pcm) where as in Q4 2015 it was £613 pcm, highlighting the high level of demand still being shown for rental properties in the area. There are three towns in the Greater Manchester region that currently make up Rightmove’s list of top five ‘areas in demand’ across the UK; Ashton-Under-Lyne, Oldham and Stockport.
Carolyn Mellor, Owner and Managing Director of homes4u commented, “The level of demand being shown within Manchester’s rental sector is still very high and the market remains extremely competitive. From the point of view of an investor, as margins start to come under more pressure with imminent tax changes, strategies may need an adjustment. For investors looking for high yields there is currently nowhere in the country that supersedes the North-West for strong returns. Teamed with levels of capital growth predicted of around 30% over the next five years in Manchester, and a 4% increase to asking rents by the end of this year, there is nowhere better to invest your money right now.”
If you are looking for a property to let or buy, please visit our property search pages where you can view all our current availability. Or if you are considering an investment in property in the Manchester area, visit our new developments page to see all of the latest instructions we have to offer with guaranteed returns. Alternatively, drop into one of our branches or give us a call.