Will Leyland, 13 January 2017
With 2017 in full swing, we can start to take a look at the big headlines from the last few weeks of 2016 and also look forward to what we can expect over the coming weeks and months.
Following a year which saw Brexit, Trump, highs, lows and rollercoaster economic performances, it is perhaps not too much to ask for a year of stability. The buy-to-let market outperformed all expectations in 2016 and finished the year on a high. Government intervention risked putting the brakes on one of the success stories of recent times, but landlords, agents and house builders managed to rise above the challenges and lead us in to an exciting new year.
Here we collect the main headlines for landlords, agents and tenants.
London continues to struggle
The latest data emerging from London has forecast that no price growth will occur in the capital’s prime housing market until 2019 due to political uncertainty and post-referendum economic doubt.
According to figures, prime London residential values remained subdued throughout 2016, with prices now 12.5% lower than their December 2014 peak.
Average prices across all prime London property fell by 2.2% in the final three months of 2016. This means values were down 4.9% year on year and 5.8% since the stamp duty increases of December 2014. A subsequent announcement of a 3% surcharge on additional homes effective from April 1st 2016 also affected the figures, released by Savills.
The highest value markets of prime central London property continue to be most affected by the stamp duty effect, with prices down by an average of 6.9% year on year, against a forecast of -9.0% for 2016.
In outer prime-London, where the average value is slightly under £2 million, prices fell by 4.0% in 2016 and are down just 2.7% from where they were two years ago.
These figures come off the back of disappointing news last year in prime, sub-prime and normal house prices across the capital. The general consensus is that the London bubble may be deflating, with wages and average earnings nowhere near keeping up with the pace of price growth and rental increases. In contrast, the North of England and the Northern Powerhouse cities have seen large growth.
Manchester City Council set to build up to 2,000 affordable homes a year
After extremely large demand in 2016, Manchester City Council has recognised the need for more homes across the city and responded accordingly by announcing plans to build up to 2,000 affordable homes per year.
As it stands, rental supply is woefully under par as many across the UK seek to move to the booming city for work and new opportunities. House prices and rental growth were both strong across the city in response to this trend.
Housing market looks strong post-Referendum
House builders, including Persimmon, have reported strong growth in early year updates to the market. Leading figures have reported that revenues have increased and demand for new homes remains strong. Despite initial reticence that demand could drop among gloomy predictions post-Referendum, potential home buyers remain keen to snap up new homes.
Good news remains abundant across the sector, and the outlook for the housing market in 2017 is extremely positive.
Will Leyland, 13 January 2017