In this report, we give an overview of the current economy, as well as an in-depth evaluation of the sales and lettings property market, and investments.
The key points included are:
- The national economy performed better than expected in Q3 – recession was avoided, although growth is weak. Nonetheless, employment remains strong and wages growth continues to outpace inflation.
- Political uncertainty continues to dominate the headlines – hopefully, this will be resolved on 12th December. If the polls are to be believed, a narrow Conservative majority looks likely which means we will leave the EU either with or without a deal on 31st January.
- Property sales at national level have held up remarkably well given the various headwinds over the past year and actually rose in October, and although y-o-y they are down the drop is small (just under 1%).
- Price growth continues to slow but regional prices have not actually fallen other than in the East of England and London.
- London sales and prices both continue to fall – although there has been a strong increase in buyer appetite in the prime locations this is being frustrated by a shortage of available stock. The weak pound continues to make UK property look attractive to overseas buyers.
- In London, the new homes build-to-rent market has slowed – probably because entry costs are lower and yields are higher in the main regional centres outside the capital.
- The rental market nationally remains healthy – demand is strong and supply is low which means rents are still rising
- In London, the wider rental market is likewise seeing healthy tenant demand against low supply and rents are rising faster than inflation. The prime locations are also seeing a return to slight rental growth off the back of sustained strong tenant demand since the summer.
- With capital values under downwards pressure and rents rising, initial yields are nudging upwards.