How the EU Referendum is Affecting Manchester Property Prices

The UK’s referendum on whether the country should remain a part of the European Union or leave, which took place at the end of June, has had far-reaching effects in many sectors, and recent figures reveal it’s impacting on property prices throughout the country. Fifty-two percent of those who voted chose to vote Leave, dividing the country, as well as towns, families and neighbourhoods. The long-term effects are still not known, but it appears areas where people voted to leave the EU have been hit hardest in terms of the property market. In fact, of the 47 cities and towns that experienced falling house prices just after the referendum, around 85% voted Leave.

In the year leading up to the referendum, England property prices rose by just over 9% on average. However, figures from July – the first full month after the referendum – revealed that the month-on-month rise had fallen to a far lower 0.4%. The referendum appears to have affected different parts of the country to varying degrees, with many analysts noting that areas that voted to leave the European Union have tended to suffer the most dramatic falls in property prices. While Manchester voted to remain in the EU, some parts of the region voted to leave. These Brexit supporting towns and districts have been the hardest hit by the slow down in house price rises.

Government data reveals that property prices in 47 cities and towns actually dropped immediately after the referendum, and a staggering 40 of these places were among those that voted to exit the EU. One such example is Rochdale, part of Greater Manchester. Rochdale residents voted in favour of leaving the Union, and the town saw a drop in average house prices of over £1,200 in the month after the vote. Similarly, Bury, where just over half of local residents voted in favour of leaving the EU, the average house fell in price by over £1,100.

The government figures also revealed that 278 towns and cities covered by their research saw house prices rise or stay at the same level as before the vote. Of these 278, just 74% had voted to leave the EU. As well as Manchester itself, places such as Stockport and Trafford also voted Remain. All three experienced house price increases in July – £2,222 in Manchester, an impressive £4,000 in Stockport, and £1,344 in Trafford.

The Brexit supporting districts and towns surrounding Manchester may have experienced some falls in property prices in the aftermath of the referendum, but data reveals that it was the north-east of the country that was hit hardest by falling prices. For example, Ribble Valley returned a vote for Leave in the referendum and saw prices drop by nearly £8,000.

Analysts and property industry experts generally believe it is too early to assess what the long-term impact of the referendum result will be, but many are in agreement that those areas that have been hardest hit have so far tended to be those that voted to leave the European Union. Many property experts believe it is likely that house prices will fall in 2017, eventually possibly recovering in the following year.

If you are currently looking to enter the rental property market as a landlord, it’s important to choose your location carefully. This is often fairly straightforward if you live in or near the area you’re planning to buy in, but it can be very difficult if you’re looking further afield for a rental property. The area you choose to buy in will of course depend on your budget and on your target rental market, and while the impact of the referendum result is yet to be fully understood, it’s worth bearing in mind that there might be a fall in EU migrants in the coming months and years. If you were planning to buy in an area with a high proportion of EU workers – for example, near a large hospital where many of the staff are migrant workers – it’s worth bearing in mind that competition among landlords may heat up in the near future. The most sensible course of action is to follow property news – both national and local – and ensure you’re fully informed before you take the plunge.

Becoming a landlord can be an extremely lucrative decision, and property remains one of the best and safest ways to invest. Keeping abreast of Moston property news, and all the local property market developments, will enable you to make the best decisions and enjoy the maximum returns on your investment.

Is “Buy-to-List” the New Buy-to-Let?

Some people have been saying that traditional buy-to-let is past its sell-by date and that new players such as AirBnB are set to disrupt the entire model. It has certainly been the case that in cities with young populations such as Manchester, London and Brighton, we have started to see a new breed of landlords buying property in order to let it out for very short-term lets.

These may be what are referred to as “party pads” – accommodation for people coming in from other parts of the country, or abroad, to spend the weekend partying. Alternatively these properties can be marketed as holiday lets at very high rents during vacation periods, with often no attempt to let them at other times.

However, the whole AirBnB rental arrangement in big cities looks like it might be strangled at birth. And once again, those crying out that traditional buy-to-let is over look likely to be proved wrong.

For those unfamiliar with how it works, AirBnB allows landlords to list their properties at the price they choose for short periods. If you saw the recent TV ads, you’ll have been given the impression that this is a flat sharing site for young travellers who want to experience life in another city. The reality, at least in our big cities, is somewhat different.

People who live in blocks of flats in London for example, have found increasing numbers of flats rented out to very short-term tenants which means a constant procession of strangers in and out of the building. Added to this, where traditional buy-to-let adds to the housing stock available across a range of income groups and household types in any city, short-term lets can take housing stock out of supply. This is because what were residential units essentially become short-term holiday homes – in other words you have mini hotels springing up everywhere, that are not licensed.

Sadiq Khan, Mayor of London, is only the latest leader of a major city to put up a red flag. He is going to investigate what impact these short-term lets us having on the capital’s housing supply and has said that he is prepared to take a look at the relevant legislation. With 42,000 listings in London, he probably needs to. He referred to the “negative amenity impacts” of these lettings. Quite what this means is anyone’s guess.

However he went on to speak more plainly about the concern that permanent housing is disappearing into short term lettings.

The residential landlords Association (RLA) did some research into those short-term lettings on-air B&B that were available for more than 90 nights – in other words, that appeared to be a professional rental. They found that 65% fell into this category. A relaxation of the law in London last year allowed people to rent rooms for up to 90 days a year on short-term lets. It may have been this that created the boom in AirBnB lets in the capital.

All of a sudden, Khan is making it clear that the much vaunted “sharing economy” is going to have to be balanced against protecting local residents and making sure that housing is kept for long-term use. He said that he intends to talk to the boroughs to see if the legislation needs revising.

New laws to curtail Airbnb lettings have already been introduced in Amsterdam, Barcelona, Paris, Berlin, New York and San Francisco (the latter must hurt particularly since that is AirBnB’s home city).

So what about Manchester?

It has to be said that AirBnB listings in Moston seem to be mostly single rooms in occupied houses, so the party economy may have some way to go before it affects M40 lettings. However, it’s clear that flats in central Manchester are definitely being listed on the site.

The French, who as we know, do not tend to mess about once they have decided something is unacceptable, have been raiding “illegal” AirBnB apartments in Paris, particularly those that have been bought purposely as – well, it’s not really buy-to-let – perhaps we need to invent a new term – “buy-to-list”?

Like Uber, which recently lost a tribunal case on whether its drivers were self-employed, AirBnB is finding that its business model is not quite as straightforward as it thought, and that local councils, laws and politics may throw a major spanner in the works as far as its operations are concerned.

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