So the market news is extremely buoyant. The latest Hometrack report shows that demand is outstripping supply and the average house is now taking 42 days to sell which is extremely quick.
Growth in the property market is strong with the UK average over 4% increase year on year. However, if we focus on a handful of areas we can see that Manchester, Liverpool, and Nottingham have been particularly positive pushing over the 6% mark in regards to the increase year on year.
Whilst we expect growth to push on over the next 12 months at the same rate we have been seeing, we expect this to calm down towards the end of the year. This is mainly because the Stamp Duty holiday will be taken away and that the majority of knee-jerk reaction moves that have taken place due to the lockdowns will be a thing of the past.
The 95% mortgages are aimed at first-time buyers, and this, we feel, is what will give the market the biggest jolt. Far bigger than the Stamp Duty holiday. The reason being is that it is first-time buyers who pretty much dictate the market.
If there were no first-time buyers this would mean that the last batch of first-time buyers would not be able to move on to become second-time buyers and so on.
This then feeds right the way up the chain and of course has the biggest impact on the market.
We feel that this is what will spur the market on in 2021 to the same kind of growth levels that we have seen over the last year or so. First-time buyers are so important for the market merry-go-round that it is good to see the government creating an easier mortgage market for them.
What Are the Most Undervalued Cities?
So this is a question we get asked a great deal. Where is the best place to invest? This question entirely depends on the price you pay, however, if we take the market value of the property then we have to look at what has happened over the last decade.
The following chart is a great starting point when working out the best city to invest in.
You can see the average price for each city but importantly the price increase from its trough (back in 2009) to its current level. You can see that London has increased 85.1% from its bottom, therefore, it should be seen that the growth has already taken place in this area, the same goes for Cambridge.
However, let’s look at a place such as Newcastle or Liverpool where the growth from its dip has been only 19% and 31.4% respectively. There should now be far more potential growth in this area. Again you can see what the last 12 months have been for the area.
In the case of the best cities the number do not lie. We have to look at the most undervalued areas and for us Liverpool, Newcastle and Manchester represent these.
POTM – Canterbury Hall, Preston
Fixed 8% NET for 5 years
This development is Phase 2 of the renowned Canterbury Halls. This development is perfectly located in Preston City Centre and offers a fixed return of 8% NET for 5 years.
Prices from £80,000 | 8% NET for 5 years | No Stamp Duty Required | Completion in August 2022 | Flexible Payment Plan | Fully Furnished with Tenant
If you would like to find out more about our POTM then please fill out the form below.
Broker of the Month – Ricky Ellson
This month we have given the award to Ricky. Without a doubt, he has set a high standard month on month and has gone above and beyond in March.
Despite issues with traveling Ricky has accumulated several miles driving all over the country to hold viewings with clients to get the exactly what they want.
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