Propertymark has analysed its sales and lettings data to reveal trends from the year.

Key Findings

• Demand was lower than last year with an average of 324 house buyers registered per branch, compared to 366 on average throughout 2017.
• Over the last 10 years, that’s still up by 31 per cent, from 222 per branch in 2008.
• The number of properties available to buy hasn’t changed drastically year-on-year, with 38 available per branch throughout 2017 and 39 in 2018,
• Supply has dropped over the last ten years, from 89 on average per branch in 2008.
• The number of sales agreed per branch throughout the year fell in 2018, from nine on average per month in 2017, to eight this year.
• Historically, this figure has remained fairly consistent, only moving between 12 and seven from 2008 to now.

Mark Hayward, Chief Executive, NAEA Propertymark comments on the findings: “2018 has been a busy year for the property market, with the Government launching several consultations to address important issues – most notably to regulate the sector, improve the buying and selling process, and address the issue of leaseholds. The housing market has notably slowed, particularly over the last couple of months, which could be a by-product of Brexit uncertainty, as buyers hold off on purchases until the outcome is clear.”

ARLA Propertymark reports that the supply of rental accommodation dropped slightly in 2018, from 189 on average per branch in 2017, to 187 this year. It reached an annual high in October, when letting agents were managing 198 per branch.

In line with this, as landlords continued to face legislative change, the number of buy-to-let (BTL) investors selling their properties increased from an average of three in 2017 to four in 2018. In April and May this year, the figure spiked to five per branch – the highest since records began in 2015.

The number of tenants experiencing rent hikes also increased this year, to 25 per cent each month in 2017, to 28 per cent on average this year.

Agents reported a spike in the number of prospective tenants searching for homes in July, when 79 were recorded per branch, compared to 68 on average across the year.

David Cox, Chief Executive, ARLA Propertymark comments on the findings: “The number of landlords exiting the rental market is rising, and those who aren’t worried about it yet, should be. BTL investors have faced a huge amount of legislative change over the last 18 months alone, and as costs rise, they are being driven out of the market and new ones are being deterred from entering. The Government is developing a joined-up approach for legislating the private rented sector, but until this has been put into action and the market is made more attractive for landlords, rents will continue to rise, competition will intensify, and tenants will continue to suffer.”

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New and Improved neighbourhoods

Investment in improvements to public spaces and upgrading existing town centres is helps to drive demand, as well as opening up previously under-used land for both residential and commercial development use. As the need for new housing continues to rise, the creation or improvement neighbourhoods will become increasingly important. Demand has increased in the outer boroughs of London and UK and this is driving strong residential price growth.

Transport

Being close to transport infrastructure opens up different parts of city / country, attracts investment, create additional demand for housing and can bring new energy to markets in and around transport hubs. The opening of the Elizabeth Line this year will cut journey times across the capital. Proposed and future transport upgrades, such as HS2 and Crossrail 2 are likely to further drive development in and around station hubs.  As buyers get prices out of central London there will be a greater demand on commuter able areas.

Regeneration

Regeneration can lead to a wholesale change of identity for an area Canary Wharf and Nine Elms are prime examples. With large-scale schemes planned or currently under development in London and in UK major cities you normally also see the provision of new shops, restaurants and cafés. Where this is happening, we see potential for the areas to outperform the wider market.

Supply

Net supply of new housing London rose to 39,560 in 2016/17, compared to the 66,000 new homes a year needed in the capital. Focusing on areas that are affordable to the wider public will have properties in short supply. These new neighbourhoods as well as existing are expected to benefit and have the potential to outperform the wider market.

Below are some areas to watch out for that will outperform the local areas surrounding

London and UK Property Hotspots places to watch out for!

Some prime areas in London Zone 1 and major regeneration areas such as Nine Elms, Canary Wharf, Greenwich and around Crossrail stations still hold all the fundamentals for a great property investment.

As well as these locations there are some great new areas for London property investors to look out for have been identified for 2019. The fundamentals surrounding any good property investment are detailed below and relevant to the new areas highlighted.

SOUTHALL/HAYES CURRENT PRICING: £600 PSF 2021 FORECAST: £750 PSF

• Significant reduction in journey times once Crossrail in in operation
• An area which hasn’t seen improvements or regeneration for a large number of years but now has large number of large projects in the pipeline with permission for 4,489 private units.
• Development and regeneration planned around station.

CAMDEN TOWN CURRENT PRICING: £1,100 PSF 2021 FORECAST: £1,500 PSF

• A London Zone 1 location but has not seen much change over years is receiving a multimillion pound investment from Mayor’s Regeneration Fund.
• Popular already for Tourist and locals there will be investments to improve public space and investments into local business.
• Part of the redevelopment includes the Camden Lock Village development, which will comprise eight buildings, a new canalside market, cafes and restaurants, a cinema, 195 residential units, a food quarter and commercial space
• Nearby Euston Station is also set for improvements, with six new high-speed platforms being built to support the opening of the first branch of the HS2 route in 2026, and a further five highspeed platforms planned for the opening of HS2 phase 2, which runs from London to Leeds and Manchester.

WOOD GREEN CURRENT PRICING: £650 PSF 2021 FORECAST: £800 PSF

• A London Zone 3 location 15 minutes to London Kings Cross is an area which has not seen investment for a few decades is nor earmarked over £3 billion for redevelopment.
• This would include 60,000 sq ft of new employment space and potential creation of 4,000 jobs
• 7,000 new homes and a new town centre with shops restaurants and café’s
• It has also been shortlisted as a potential station along the Crossrail 2 line

LISSON GROVE CURRENT PRICING: £1,400 PSF 2021 FORECAST: £1,850 PSF

• Lisson Grove is the neighbouring area to Regents Park, St John’s Wood and Marylebone but has not gained the appeal of its well know neighbouring areas.  This is all set to change with comprehensive regeneration and improvement to the local housing stock.
• Westminster council launched a 20-year, £1.2 billion regeneration blueprint for the Church Street ward, in which Lisson Grove is located
• As part of the plan, the local authority has pledged to favour art and antiques tenants over other uses when shops come up for lease, with the aim to turn it into a market to rival Portobello Road.

CANADA WATER CURRENT PRICING: £900 PSF 2021 FORECAST: £1,250 PSF

• A London Zone 2 location the This South East of London region is priced more favourably compared to other London Zone 2 locations and has excellent transport links with journey times of 2 minutes to Canary Wharf and 12 minutes to the West end.
• The Canada Water Masterplan, led by British Land, is a £2 billion project to create a major new town centre within Southwark.
• This will comprise 3,500 new homes, offices, shops, restaurants and public spaces, including a three acre park, a cultural and leisure centre and a new campus for King’s College London.
• The new masterplan, coupled with the existing transport links, will serve to generate a greater rate of growth than in the wider area.

WEST HAM CURRENT PRICING: £700 PSF 2021 FORECAST: £950 PSF

• West Ham station was recently rezoned by TfL from Zone 3 to Zone 2/3,
• The area has excellent transport options that include the Jubilee, District, Hammersmith & City, Overground and DLR lines, along with Crossrail running from Stratford from 2019, looking to make it one of the best-connected transport hubs in East London.

LEYTON CURRENT PRICING: £675 PSF 2021 FORECAST: £800 PSF

• Located just above it’s neighbouring area Stratford which has seen a massive amount of regeneration with Westfield, Stratford International Station and the Queen Elizabeth Olympic Park the area has been identified by the local council as a high priority growth area.
• Plans to create a new community to the west and south of the town centre. As part of this, there are proposals to build new homes, primary schools, health and public facilities.
• Improvements are to be made to road and rail access, resulting in better connections into the Queen Elizabeth Olympic Park.
• Timeframe is for this to be complete by 2022

HACKNEY WICK CURRENT PRICING: £700PSF 2021 FORECAST: £850 PSF

• Hackney Wick is another area on the edge of Stratford and will benefit from public sector led regeneration led by the London Legacy Development Corporation.
• Plans are in place to create a new neighbourhood with thousands of new homes, live-work dwellings, workshops and small business premises.
• The overground train station, which connects the area with Canary Wharf and the West End is undergoing a £25 million facelift to help improve accessibility.

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Nationwide has revealed that house price growth in November has gone up slightly to 1.9%

Robert Gardner, Nationwide’s Chief Economist, explains: “While house price growth picked up a little in November, it remained relatively subdued at 1.9%, up from 1.6% the previous month.

Looking forward, much will depend on how broader economic conditions evolve. In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows.

If the uncertainty lifts in the months ahead and employment continues to rise, there is scope for activity to pick-up through next year. The squeeze on household incomes is already moderating and policymakers have signalled that, if the economy performs as they expect, interest rates are only expected to rise at a modest pace and to a limited extent in the years ahead.

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New data from OnTheMarket.com has shown that those renting in London, Camden is the borough are spending the highest percentage of their salary on rent.

Key Findings

• The analysis has revealed that when renting a one bedroom property in Camden, 61% (£1,944.28) of the average person’s salary within the borough is spent on rental costs, for a two bed the percentage is 46% (£1,471.05).
• The average gross salary of a person living in Camden is £3,181.17 per month, regardless of where they work.

Vikki Bennett, spokesperson for OnTheMarket.com: “Costs within the London rental market have been driven-up in recent years as first-time buyers have battled to enter the housing market and second-steppers have struggled to trade-up while prices have risen.

While it’s no surprise that cost remains the most likely primary factor when considering a new home, our analysis shows some stark variations across each borough of salary percentages being spent on rent. So while London rents remain high across the board, considering all available options, such as moving to a nearby borough just a few miles away, can prove to have significant cost savings.

Hampstead, within the borough of Camden, is likely to be of high significance as to why Camden comes out with the highest percentage, due to the exceptionally high rental prices within this particular area.”

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Bovis Homes has said that it remains on track for a “record year” of profits for 2018.

The housebuilder issued an update and said that it was fully sold for its targeted FY 2018 completions and anticipated delivering “another controlled and disciplined period end” in December.

Bovis did say that the uncertainty of Brexit “has impacted discretionary buyers”. The housebuilder has increased its use of part exchange which, in its second half stands at around 15% of reservations. But it added: “We continue to be disciplined in our use of part exchange with completions in the period operating in line with our policies and procedures.”

Greg Fitzgerald, Bovis’ group ceo, said: “The group’s improved operating performance including the transformation of our customer service and step change in build processes and quality is driving a significant improvement in our financial performance. We are fully sold for this year and continue to target a record year of profits for 2018.”

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Recent Data released by ONS on the UK housing market average house prices in the UK rose by 3.5% in the year to September – marginally up from 3.1% in August.

Key Findings

• There is a slowdown across the south and east of England
• London prices fell by 0.3% over the year.
• The West Midlands showed the highest annual growth, with prices increasing by 6.1
• East Midlands at 6.0%.
• House prices in Wales and Scotland both increased by 5.8% over the last 12 months
• Northern Ireland saw growth of 4.8%.

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Halifax has reported that during the three months to October, average house prices across the UK

Russell Galley, managing director at Halifax, said: “The annual rate of house price growth has fallen from 2.5% in September to 1.5% in October, which is the lowest rate of annual growth since March 2013. However, this remains within our forecast annual growth range of 0-3% for 2018.

House prices continue to be supported by the fact that the supply of new homes and existing properties available for sale remains low. Further house price support comes from an already high and improving employment rate and historically low mortgage rates which are creating higher rates of relative affordability. We see this continuing to be the case over the coming months and we remain supportive of our 0-3% forecast range.

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Nationwide has revealed that during October annual house price growth slowed to 1.6%

Robert Gardner, Nationwide’s Chief Economist, said: “October saw a slowdown in annual house price growth to 1.6% from 2.0% in September. As a result, annual house price growth moved below the narrow range of c2-3% prevailing over the previous 12 months.

However, this was broadly in line with our expectations, as the squeeze on household budgets and the uncertain economic outlook is likely to have dampened demand, even though borrowing costs remain low by historic standards and unemployment is at 40-year lows. We continue to expect house prices to rise by around 1% over the course of 2018.

Looking further ahead, much will depend on how broader economic conditions evolve. If the uncertainty lifts in the months ahead, there is scope for activity to pick-up throughout next year. The squeeze on household incomes is already moderating and policymakers have signalled that interest rates are only expected to raise at a modest pace and to a limited extent in the years ahead.

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88% of landlords have made a profit from their lettings activity in Q3, up by 2% from Q2, according to new research from BM Solutions.

Key Findings

• However, they are feeling less confident year-on-year when it comes to the prospect of capital gains and the UK financial markets.
• The average rental yield dropped in Q3 from 6.2% to 5.9%, following the 0.4% rise recorded in Q2 when average rental yields were at their highest point since Q4 2014.
• North West and Wales are currently achieving the highest yields at 6.7% and 6.3%.
• Rental yields in Central London (5.3%)
• A third of landlords raised rents over the past 12 months, representing a slight increase from Q2.
• More landlords are also seeing rents rising in the areas where they let properties, with an increase of 9% from Q2.

Phil Rickards, head of BM Solutions, said: “Despite many recent challenges to the buy-to-let market, it’s encouraging that more landlords have made a profit from their buy-to-let properties this quarter, and that landlords are feeling slightly more upbeat when it comes to the near-term prospects for rental yields, the UK private rental sector and their own letting business compared to Q3 last year.

“For those speculating about the future of BTL, the figures supporting tenant demand should help to dispel this myth. Considering the much talked about shortage of housing supply, it is vital that we continue to support a healthy private rented sector and with tenant demand scores improving, or remaining stable across all UK regions, it is clear that the PRS still has a very important part to play.”

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New research conducted by Lloyds Bank has found that homeowners living 60 minutes outside of Central London could pay up to 60% less for a property.

Key Findings

Workers in Central London can save an average of £483,342 by commuting up to an hour each day from areas such as Basingstoke, Crawley, Gravesend, Windsor and Northampton.

Prices in these areas are on average around £325,091 – a whopping £483,342 lower than the average of £808,434 for a property within travelcard zones 1 and 2.

A 40-minute commute will save homebuyers £375,114 (46%)

Buying in towns approximately 40 minutes away, such as Billericay, Hatfield, Staines and Woking, will pay an average price of £433,320 – which is still £375,114 (46%) lower than in zones 1 and 2

A 20-minute commute will save homebuyers £295,075 (36%)

twenty minutes distance away from the centre of the capital, commuters from towns such as New Cross and East Croydon benefit from an average house price £295,075 lower than in Central London.

Andrew Mason, Mortgages Director at Lloyds Bank, said: “Buying a home in Central London is out of reach for many where house prices are around 16 times the average UK wage. In almost all towns in this survey, housing affordability is significantly greater with a London salary compared to what can be earned locally and for commuters with up to an hour’s journey, the reward is an annual salary that is, on average, £8,600 (18% ), higher than what they could earn in their local neighbourhood which is around £40,000.”

Although many commuter towns offer affordable properties, but with longer and more expensive journeys, the decision to commute is not simply a trade-off between financial costs and journey times. Quality of life is an important consideration. Family circumstances, schools, physical environment and value for money all come into the balance.

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