BEWARE OF THE RIPPLE
News of the rapid slowdown of the London market should be monitored very carefully.
The influential factors for this relate to record unaffordability, significant tax changes in the buy to let market, which has influenced investor demand along with punitive stamp duty hikes on additional residential homes such as second homes (increased by 3% on most purchases) and again the buy to let properties. Add to the reduced activity is rising supply and that has softened growth further still. The sum of all these pressures has meant the lowest growth in London for 20 months with a prediction that next year will have a 4% growth in value substantially less than has been seen in recent years.
So, what of the Northern Powerhouse?
While the same factors that have impacted on London effects our local market place, the Manchester quadrant enjoyed over 7% growth this year. The mitigating circumstances however, is that we still very much have a shortage of supply, which acts as a counter balance. Still, the past has demonstrated that when London falls the ripples eventually reach the provinces and whilst the forecast for next year locally is another 7% growth, don’t be surprised if the market levels off in the tail end of 2017.
I was at a conference before Christmas with the local independent agents from around Stockport and the greatest concern still was the lack of new homes coming to the market. Certainly in SK4 with 50% of property sales to people from outside the area, it’s not rocket science to recognise there isn’t enough supply to go around. After all, with the transport infrastructure around the area, prestige homes and superb schools, it is a magnet for professional people.
Soft Brexit or hard Brexit seems to not be the issue then and underpinning continuing confidence in the property sector is the availability of funds the government needs for a robust housing market to underpin the economy along with the enthusiasm from developers to build quality projects.