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.

Brexit becomes a reality…and the Prime Minister resigns. How did the property industry react?

Brexit becomes a reality…and the Prime Minister resigns. How did the property industry react?


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A double whammy last week for all of us as we face the far-reaching repercussions of the UK voters’ choice. Not just the short, medium and long term effects of leaving the European Union, but a departing Prime Minister, the fuss of choosing a new Conservative leader and, thus, a new cabinet and, most likely, another General Election. And that’s just for starters.

What have we done?

The Twitter-sphere is awash with young people blaming ‘old people’ for wrecking their future. ‘Old people’ were described as the age bracket 25-49. Wasn’t it ‘old people’ who, after all, voted us into Europe in the first place? However, the Brexit comment had seemingly blown itself out and agents are back to promoting their services and properties, successes and positive thoughts for the future.

The Negotiator team has been hearing from many property commentators, who are generally taking a reasonably brave and positive view – once the initial shock settles.

James Roberts, Chief Economist at Knight Frank says that the value of the pound will inevitably fall in the near-term, as will the stock market. The chance of a technical recession, as business investment is curtailed, is high, and exporters and financial services firms will be in the forefront of the downturn.

“In the light of the above risks we expect the Bank of England to respond quickly. An interest rate cut of 25 basis points is a strong possibility at the Monetary Policy Committee’s July meeting, or perhaps earlier if required. We may also see a return of quantitative easing, if there are signs that investment is deteriorating.

“This should in our opinion help restore confidence as the summer progresses.

“Ultimately, it should be remembered that the UK is a country with 60 million wealthy consumers, and a high skill workforce. Consumer goods firms like Coca Cola and BMW will always want to access a market this big. Skills based employers like PwC and Google will always want to access such a large pool of talented workers.

“The underlying strengths of the UK economy remain in place, and ultimately real estate is an investment that works best for those who pursue long-term goals.”

Michael Robson, Andrews Property Group “The UK’s decision to leave the EU means that the uncertainty of the last few months, which has negatively impacted the market, will now continue and it’s hard to judge for how long this will be the case. This isn’t good news for homeowners.

“Previous market cycles suggest that timescales for recovery tend to be slow and long and we should be prepared for anything between three to five years for any significant bullishness to return.

“However, let’s not lose sight of reality. The underlying drivers of the property market (namely demand) will not disappear and so the market will recover as will prices. This presents a great opportunity for purchasers – especially those taking their first step on the property ladder – as they’ll have the opportunity to buy during the current lull and then reap the benefits as the market recovers.”

Richard Donnell, Insight Director at Hometrack believes that the immediate impact is likely to be a fall in housing turnover and a rapid deceleration in house price growth as buyers adopt a wait and see the short term impact on financial markets and the economy at large.”

“The decision will be most keenly felt in the London housing market which is fully valued and already facing headwinds. History shows that external shocks can reduce sales volumes by as much as 20 per cent with sales volumes already down over the last year. House price growth is already weak and running in low single digits in central London areas and modest price falls now appear likely in higher value markets as prices adjust in the face of lower sales activity.”

Martin Robinson, Director of Sales at Hunters Property Group takes a quietly positive view, “The impact on the UK property market will be difficult to determine until the negotiations between the UK and EU are finalised. We expect some clients to pause to familiarise themselves with this news, but in the past we have found the UK property market has been very resilient against changes in legislation. At the end of the day, bricks and mortar will always be a good investment option in the UK.”

David Brown, CEO of Marsh & Parsons, sums up the thoughts of many commentators this morning.“Whatever result you were hoping for on a personal level, it’s hard to argue against the fact that this result will bring further uncertainty and also creates far more questions than it answers in terms of what happens next as Britain extricates itself from the continent in terms of procedures and processes. It’s also worth noting that if the pound weakens against the Euro as some have predicted, then it could lead to a significant increase in overseas property purchases – not bad news in itself, but unlikely to have been among the intentions of many ‘leave’ voters.

“On the plus side, it makes the picture clearer for any individuals who were sitting on their hands, waiting on the outcome of the result to make their move. It’s also worth putting things into a wider perspective. Regardless of the referendum result, there is still plenty of pent-up demand in the UK housing market and a leave vote doesn’t change that overnight. The decision to leave doesn’t alter the fact that plenty of people have to and still want to move.”

Andy Martin, Senior Partner at Strutt & Parker said, “I am personally disappointed because I do not think there has been a case made to say what it means in terms of the governance, the running of the country and the changes in the legislation we would want to see. It is going to cause a huge amount of disruption to the markets while everybody takes stock of what it actually means and the government starts giving us clear policy direction. Before then we are going to have volatility, which is a risky thing to have in these markets because economic performance is still not something that is a given.

“As a firm, we are market driven. The market has shown signs of volatility in the lead up to this vote. We have seen a real cutback in trading due to the uncertainty of this vote. What we are now waiting to see is how our clients and markets will react to this. I suspect that they will continue to tread with caution until they can see the outcome. We have already seen in the currency markets that this is the case, with sterling being marked down. Everybody will say that makes the UK cheaper but, at the same time, instability affects the confidence of markets. I suspect this will be the overriding factor for the next period.”

The final word (for today) goes to Rob Clifford, Chief Executive of CENTURY 21 UK and Group Commercial Director of the SDL Group

“The vote to leave the EU presents the UK housing and mortgage market with a number of potential risks and challenges simply because of the uncertainty we are now faced with. While EU membership has often meant increased regulation for our sector – which can often be unwelcome and in my view often disregards the maturity and complexity of the UK housing and financial services market – our view on the Referendum was always one based on delivering the maximum stability for all, and therefore we would quite clearly have preferred a vote to Remain.

“Pre-vote there were a number of predictions of a negative impact in terms of house price levels and housing transaction numbers brought about by a vote to Leave, and there are obviously concerns that these predictions will now be played out. In terms of the result itself we don’t regard it as having any direct detriment to the SDL Group, its businesses, or any of the services we offer to thousands of consumers each year.

“However, we remain anxious about the much broader, potentially negative macro-economic impact this result could deliver. We do remain committed to the markets we operate in and will be working incredibly hard to ensure customer satisfaction across all of these.”

Cost of average property ‘to rise by £60k in 2020’

Property prices are predicted to continue their upward march in the years ahead. Prices are expected to be 3.5pc higher in 2016 than they were this year, with further annual increases of around 4pc in the four years that follow.

The average UK house price will leap by nearly £60,000 over the next five years according to an economic forecaster, hitting more than £320,000 in 2020.

The rungs of the property ladder are also moving further apart, according to Cebr (the Centre for Economics and Business Research) – making it harder for people to trade up to a bigger home as the cost has “skyrocketed”.

The forecaster said that house prices in 2015 are set to be 5.6 per cent higher compared with average prices across 2014 – and the average UK property value will stand at a record high of £263,000 this year.

Property prices are predicted to continue their upward march in the years ahead. Prices are expected to be 3.5 per cent higher in 2016 than they were this year, with further annual increases of around 4 per cent in the four years that follow.

These increases will take the average price of a UK property to £321,600 during 2020 – £58,600 more than the average house price in 2015, according to Cebr.

Cebr had previously predicted that house prices would increase by 4.7% annually in 2015, but it has revised its figure upwards to 5.6 per cent in light of a lack of properties coming up for sale, which is “drying up supply” and putting an upward pressure on prices.

It also says that the price gaps between different property types are widening. This is making it harder for people to climb up the property ladder.

For example, in London, someone who wants to move from a flat to a terraced home which is perhaps more family friendly would now need to find an extra £176,000.

This cost has nearly quadrupled compared with 2000, when the price of trading up between these property types was £46,000, according to Cebr.

Nina Skero, Cebr economist and main author of the report, said: “A reduction in the number of properties being put on the market has placed further upward pressure on house prices in some parts of the UK. This is a result of low levels of housebuilding, but also other factors such as an ageing population and the rising cost of moving up the property ladder.

“The price gap between a first-time home and a larger family home has skyrocketed in some regions, such as London, curbing activity in the housing market. For many, the rungs of the property ladder are moving further apart, making it impossible to upsize.”

Current housebuilding plans are not enough on their own to control rising house prices, Cebr said.

It suggested that with an ageing population and retired people less likely to move home, a stamp duty exemption could encourage pensioners to put their larger, family-sized homes on the market.

Why are house prices expected to keep on rising?

  • Here are five key reasons given by property forecaster Cebr as to why the supply of homes for sale has been drying up, putting an upward pressure on prices:
  • Households expect property values to keep rising. People want to sell at the top of the market, but at the moment few anticipate a downturn in prices.
  • Demographic changes and the UK’s ageing population. Home ownership has risen dramatically among older households since 1981, but has collapsed among younger households. With retired people less likely to move home, this is curbing the number of people putting property up for sale.
  • A substantial increase in the cost of moving up the property ladder, especially in London. Moving up the property ladder has historically been a key reason to sell a home.
  • Low levels of housebuilding are reducing the number of new builds being put up for sale in the UK.
  • The high cost of moving home, with stamp duty costs curbing house moves. This is particularly the case at the prime end of the property market, which saw a substantial increase in stamp duty rates in last December’s Autumn Statement.

Is Manchester becoming too much like London?


Is Manchester becoming too much like London?


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Manchester may have a reputation for playing by its own rules, but increasingly it is starting to resemble the capital – and not always in a good way

Ever since George Osborne dreamt up the Northern Powerhouse, Manchester has been in the national limelight, held up as a shining example to other cities as the sort of fully-fledged post-industrial revival the north has long been seeking.

As the city – and particularly the city centre – vies to compete with the capital, some of the boom signs associated with London are starting to materialise here, too: an explosion of new restaurants and bars, tower blocks that scrape the skies and even a new elected mayor.

But equally some of the capital’s high profile problems are making themselves felt too.

Mancs are being priced out

You’ll probably have seen the headlines this week about Londoners being driven out of the capital by an exponential growth in property prices.

Yet there are also glimmers of that here.

Manchester city centre is seeing a property boom that’s taken even the council by surprise. The town hall is expecting to bring in an extra £400,000 in planning fees next year just thanks to that growth.

But who are those apartments being built for?

Every town hall planning meeting sees councillors tear their hair out over the lack of affordable housing being proposed in new city centre blocks – as officers and developers argue on virtually every occasion that including a cheaper element would make it unviable.

Figures from Rightmove show the average sale price for a flat in the M1 postcode rose by 7pc just between April and September last year, to more than £188,000. And a great many are being marketed only to buy-to-let investors.

And it’s not just London that faces a dire shortage of new social housing. While the ten Greater Manchester authorities have declared an aim of 10,000 new homes a year, there is so far minimal talk of council homes within that.

Foreign investors

On the same note, it isn’t just London that is being built on foreign money.

Much of the talk about the capital’s property boom this week has been over whether Russian oligarchs are to blame, having been overly courted by politicians.

We don’t have so many oligarchs of our own up here. But increasingly it is overseas cash fuelling the huge new commercial and residential developments shooting up in Manchester.

Chinese investors BCEG have a hand in both Gary Neville’s new development at Jackson’s Row and the expansion at Manchester airport, German giants Patrizia originally owned the First Street development before flogging it on to someone else, Hong Kong’s Peterson group are slated for a massive overhaul of the Great Northern on Deansgate and then – most significantly of all – the Abu Dhabi United Group are providing most of the the capital behind a £1bn expansion of new housing to the north and east of the city centre.

Is that a bad thing? Council chiefs would argue no. A city whose public sector has seen government cash dry up is now able to get things built – meaning growth, jobs and place for people to live.

But equally there are questions over who Manchester’s boom is going to profit, particularly as house prices continue to soar out of the reach of so many ordinary Mancunians – and the wages of people living in the city remain £78 a week lower than those who work in it.

Skyscrapers

As Londoners ponder the 83-storey ‘Paddington Pole’ colossus being planned by the people behind the Shard, Manchester’s own booming skyline is looking upwards too.

Beetham Tower architect Ian Simpson has spoken of a new ‘cluster of skyscrapers’ around the southern gateway of the city – and true to his word has drawn up plans for two new giants to rival the Hilton.

Not only is he proposing a sister tower for the Beetham, down the road near First Street, he also recently unveiled his vision for a massive 64-storey beast on nearby Great Jackson Street.

Meanwhile down the road at the old Granada Studios site, plans for a ‘vertical village’ by Allied London could also see at least one tower dwarf the Hilton.

Notably even Ian Simpson cautions that there may only so many that can be built before the next inevitable economic crash though, so they’d better get their skates on.

Everybody else hates us

It used to be that everyone much north of Watford hated London, down there with its soft southern ways and sense of entitlement.

But there’s a smug new kid on the block.

In recent years all national politicians have done is go on about Manchester, to the point that other northern cities must be looking on with increasing irritation as they are told to be more like us.

Closer to home, the city is not even always that popular with its Greater Manchester neighbours.

In recent months persistent complaints have swirled round outlying parts of the conurbation – particularly Rochdale, Oldham and Tameside – that Manchester is calling too many of the shots. That’s always been the case, but those complaints are growing louder.

New Oldham West MP Jim McMahon broke ranks in his maiden parliamentary speech last week, his first since leaving office as Oldham council leader, to hint strongly at just this.

“Devolution must be more than a love affair with big cities,” he said, a coded attack on those within Manchester town hall seen as focusing too much on shiny new things for the city – rather than the former mill towns to the north.

 

Homelessness

The painfully high profile poverty of rough sleeping used to be associated with the supposedly gilded pavements of central London.

Westminster council in particular has come under fire for shifting homeless people out into outlying boroughs (partly because of the housing market mentioned above) – but also for a range of measures that have caused public outcry, including a ban on soup kitchens.

In Manchester some would argue the town hall has been just as draconian, launching a court bid last year to shift a group of tents from its streets.

But the camp, with its relatively small group of protesters, was in some ways a distraction from the bigger problem: rough sleeping has gone up 10-fold in Manchester since the coalition took power.

Increasingly homeless people are moving out of the city centre and into the southern suburbs of Withington, Didsbury and Chorlton, signs that the problem is finding new ways to manifest itself.

Action is being taken by a council with dwindling resources, including opening dozens of new hostel beds and using empty public buildings as drop-ins.

Yet perhaps this is the visible downside of a London-style boom: it also proves to be a magnet for the destitute.

A mayor

An obvious one, perhaps – but a symbolic parallel with London’s voice on the national stage.

The profile of Ken or Boris has been repeatedly used as an argument for Greater Manchester’s own new elected mayor, due to be introduced next year. That’s the idea, anyway.

So far public support has been pretty thin on the ground up here, not least because the last government confused matters by making cities hold mayoral referenda – which in Manchester came back as a ‘no’.

But like it or not, Greater Manchester is getting one.

The big question is whether that position is able to carry the same kind of clout afforded by the cartoonish characters that have so far held the reins in our capital and others around the world.

All the signs are that Labour – or possibly a charismatic independent – will probably win here in 2017.

But while the party nationally focuses its attention on London’s upcoming mayoral race, little thought seems to be going into ours.

Yet this could be make or break for a project that Manchester’s Labour hierarchy is just as invested in as George Osborne.

If Labour get the wrong candidate, or suffers a painfully low turnout, our mayor could end up merely whispering as London’s city hall continues to roar.

Gridlock

Manchester council won’t thank me for saying this, but memories of being stuck, not moving, on the bus down Charing Cross Road as a student have been looming ever larger in my mind of late.

The kind of city centre traffic seen in Manchester at the moment is reminiscent of pre-congestion charge gridlock in the capital, as a perfect storm of roadworks conspire to bring commuters to a halt.

Those roadworks are only temporary, obviously.

But while the town hall is keen to get people out of their cars and onto the tram, it’s hard to escape the sense that as more flats go up, the streets are inevitably going to get more congested.

Indeed several big new multi-storey car parks are being planned as part of big forthcoming development schemes, including on Oxford Road.

So even when those roadworks die down, the streets are surely only going to get busier.

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