Podcast Summary
Strong demand in UK property market outside of London: Despite London's dominance in property market discussions, opportunities exist outside of the capital with high demand and multiple offers leading to properties selling above asking price due to lack of stock.
The UK property market, particularly outside of London, is experiencing a significant sellers market not seen in over a decade. According to data from Rightmove, there are 34% more inquiries per property compared to the same time last year. Demand is exceeding supply, leading to multiple offers and properties selling above asking price. This trend is prevalent outside of London, where the market is "motoring" with a lack of available stock. It's essential to remember that London, which has historically dominated property market discussions, does not follow the same trend. While the media often focuses on London, there are opportunities in the rest of the country for those willing to look beyond it. Overall, 2023 is shaping up to be a strong year for the property market, but it's crucial to remember that market conditions vary across different regions.
Londoners leaving due to pandemic, Brexit, and desire for more space: London's population is shifting significantly due to the pandemic, Brexit, and a desire for more living space. This could impact demand for certain properties and businesses, but the full extent is uncertain.
London is experiencing significant population shifts due to the pandemic and other factors like Brexit. According to recent surveys and estimates, a large number of Londoners, particularly foreign-born residents, are considering or have already left the city. The reasons include a desire for more living space, such as gardens or proximity to green areas, as well as Brexit-related reasons and the need to return to family during the pandemic. These trends have important implications for investors in London, as they may impact the demand for certain types of properties and businesses. However, it's important to note that not all Londoners are leaving, and many still prioritize staying in the city. Additionally, the full extent of these population shifts is still uncertain, as some estimates are based on surveys or projections rather than hard data. Overall, the situation in London warrants careful consideration for investors, and staying informed about the latest developments is crucial.
Decrease in demand for city housing leads to substantial rental price drops: The COVID-19 pandemic caused a decrease in demand for city housing, leading to significant rental price drops in London (12.4%), Edinburgh (10%), and Manchester (5.3%). Factors include an exodus from cities, decreased demand for shared housing and student accommodation, and the conversion of short-term rentals to long-term rentals.
The COVID-19 pandemic has led to a significant decrease in demand for housing in city centers, particularly in international cities like London and Edinburgh. This decrease in demand, coupled with an increase in rental stock on the market, has resulted in substantial rental price drops. Inner London saw the largest annual fall in rents (12.4%) in the last quarter of 2020, followed by Edinburgh (10%) and Manchester (5.3%). Factors contributing to this shift include an exodus of residents from cities in search of more affordable housing and space, a decrease in demand for house shares and student accommodation, and the conversion of short-term rental properties back to long-term rentals due to decreased travel. Landlords are reporting increased tenant negotiations for lower rents, and some renters are even considering moving due to the abundance of affordable options. This trend is expected to continue until demand for city living picks back up.
London property market fragmentation: Despite a 7% increase in London house prices, rentals have collapsed. Pandemic lifestyle shifts have caused a disconnect between house prices and rentals, leading to a reevaluation of where people want to live, making it hard to predict future trends based on historical data.
The London property market is no longer a monolithic entity, but rather a fragmented one, with significant differences emerging between various neighborhoods. While rentals have collapsed, house prices have not followed suit, with the Land Registry reporting a 7% increase in London house prices last year. However, recent data from Zoopla suggests a 2.3% decrease in property prices in the last 3 months. This disconnect between rentals and house prices can be attributed to the pandemic-induced shift in people's lifestyle and working patterns, leading to a reevaluation of where they want to live. The ripple effect of price increases in desirable areas no longer holds true, as people are now willing to commute longer distances or move to less desirable areas to accommodate their new work arrangements. Overall, the London property market is experiencing unprecedented change, making it difficult to predict future trends based on historical data alone.
London property market fragmentation due to pandemic: Some areas may buck trend with price rises in short term, but London's international status ensures recovery in medium to long term, with exact impact uncertain due to diverse neighborhoods
The London property market is experiencing unprecedented fragmentation due to the pandemic, with some areas seeing a surge in demand and others experiencing a decline. This complexity makes it difficult for investors to predict the future direction of London property prices. In the short term, certain areas with ample greenery and desirable living conditions, such as Richmond, Hampstead Heath, and Muswell Hill, may buck the trend and see prices rise. However, in the medium to long term, London's status as an international city will ensure a return of tourists, students, and immigrants, which could lead to a recovery in property prices and rents. Yet, the exact impact on the market remains uncertain. The unique character of London, with its diverse neighborhoods, further complicates matters, making it challenging to make definitive predictions based on data.
London's Real Estate Market: City vs. Suburbs: The future of London's real estate market is uncertain due to work from home trend and changing lifestyle preferences, leading to a fragmented market with opportunities in areas catering to city and work-from-home lifestyles.
The future of London's real estate market is uncertain due to the ongoing work from home trend and changing lifestyle preferences. While some people are eager to return to city life and the opportunities it offers, others may opt for more peaceful suburban or rural environments. The work from home situation adds a layer of uncertainty, as some professionals may no longer need to be in the office every day or even in London at all. This could lead to a fragmented market, with some areas becoming more desirable for their proximity to city amenities and others for their peaceful environments. Investing in London's real estate market currently carries risk, but keeping an eye on the situation and identifying areas that cater to the needs of both city and work-from-home lifestyles could yield opportunities in the future.
London's Property Market: Opportunities Amidst Challenges: Monitor London's market during downturns, have a contrarian approach, find reliable data, research granularly, consider home counties, reassess opportunities end of year.
London's property market may present opportunities for investors despite its current challenges. The speaker suggests that investors should start monitoring the market when it's not performing well and have a contrarian approach. However, finding reliable data and conducting granular research are crucial. The home counties are another potential area for investment due to their proximity to London and active market. The speaker encourages listeners to keep London on their watchlist and reassess investment opportunities towards the end of the year. A listener success story is shared, highlighting the benefits of utilizing The Property Podcast's resources during the lockdown to start a property investment business.
Explore Property Hub for Investment Education and Community Support: Property Hub offers resources for property investment, including education, strategy development, and a supportive community. Use the free AllTrails app for local exploration and physical activity.
Property Hub is an essential platform for those interested in property investment, offering education, strategy development, and a supportive community. It's never too late to start, and success stories, no matter the size, are encouraged to be shared. The Hub provides resources through various channels, including social media, podcast reviews, and the Property Hub forum. This week's Hub Extra resource is AllTrails, a free app that helps users discover new walking routes in their local areas or during travels, promoting exploration and physical activity. London, in particular, has numerous hidden walking paths, making it an excellent place to use the app. Overall, Property Hub aims to provide valuable insights into the property market, with London being a current focus, and encourages community engagement and personal growth.
Upcoming Property Podcast topic and Ask Robin Rob Q&A session: Listeners can look forward to engaging episodes on real estate topics and listener questions in the upcoming week
There are numerous topics to explore in the realm of real estate, and the Property Podcast will be delving into one of those topics in an upcoming episode on Thursday. Prior to that, they will address some listener questions in Ask Robin Rob on Tuesday. So, keep tuned in for those engaging sessions. Until then, have a productive and enjoyable week!
