Hot spots in a cold climate
A slump in the UK property market has been regarded as the first casualty of the global economic slowdown. Yet this isn’t the time to write off its potential entirely, says Property Correspondent Emma Mahony ANYONE WHO REGULARLY dips their toe in the property market – someone looking to buy to let, or put capital into housing – will know that [...]
A slump in the UK property market has been regarded
as the first casualty of the global economic slowdown.
Yet this isn’t the time to write off its potential entirely,
says Property Correspondent Emma Mahony
ANYONE WHO REGULARLY dips their toe in the property
market – someone looking to buy to let, or put capital into
housing – will know that the time to trade up is during a
recession, when you will get more bricks for your money. While
no one dares to use the “R” word as yet, there is little doubt that
with the credit crunch and rising oil prices, tougher times are here.
The most trusted Land Registry figures for the past quarter (end of May
2008), tracking the volume of completed sales nationwide, showed an
overall decrease in house price inflation of 2.7% – the lowest level since
November 2005. Whereas 18 months ago, an investment property might
have been fought over by first-time buyers or developers, now a more
solid, dependable buyer is having the market to themselves.
So how is the current climate impacting on different areas for investing?
> London
Clapham in south-west London is seen as a good place to invest because
of its abundance of small flats and bigger family houses for letting. As
lettings manager Caroline Dude of Hamptons reports: “Relocation agents
have been active despite reports that their activity may be more limited
given the financial climate in the City.”
The area hit the worst of the credit crunch up to December last year,
when prices fell to an average of £333,417 compared to a peak average
of £453,832 from April to June a few months earlier. Now the market
is recovering and prices are back up to an average property price of
£488,053, according to the latest Land Registry figures, proving that it is
an area which will weather the worst of the housing market storms.
Price of 1-bed apartment and 3-bedroom apartment/house:
£275,000 and £500,000 respectively
Estate Agents: Hamptons, +44 (0)20 7498 8686; www.hamptons.co.uk
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> Nottingham
Unlike London, Nottingham started with a slow
beginning to the year, but investment buyers have
been entering the market since the beginning of
the summer to pick up deals as the rental market
starts to overtake sales. James Gamble of the
Nottingham agency Thomas James comments:
“Sales have slumped by around half in volume
since this time last year. However, a number of new-build apartments have
recently come on the market after a five-year building boom, meaning that
the one- or two-bedroom apartments in the student areas of Lenton and
Arboretum are attracting investors.
“We are seeing a different type of investor,” Gamble points out.
“One with their own money behind them rather than relying heavily
on a mortgage.”
Price of 1-bedroom apartment and 3-bedroom apartment/house:
£80,000 to £150,000 respectively
Estate Agent: Thomas James, +44 (0)845 296 0746; www.tjea.com
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> Glasgow
Scotland’s property market differs from its English
neighbour’s because of its “offers over” system,
where the lowest reserve price is placed on a
property which may go for around 35% more.
This gets around the gazumping problem because
sealed bids are invited by a definite closing date.
Glasgow has not enjoyed the same property
boom as the rest of the country, so it is not expecting the same downturn,
but Andrew Perrett of Savills admits that the “volume of sales has definitely
fallen – except in the top end above the £2m mark”.
The city’s West End is still the place to invest, where the universities and
hospitals are sited and a more bohemian lifestyle is enjoyed, as well as
Glasgow Harbour – the biggest brownfield regeneration project in Europe
– where 650 apartments were sold as phase one of the project in 2003.
Price of a 1-bedroom apartment (Glasgow Harbour) and 3-bedroom
apartment/house: £300,000
Estate Agent: Savills, +44 (0)141 222 5875; www.savills.co.uk
