UK Housing Market at its Worst in 20 Years – What Does This Mean for Manchester Residents?
Recent reports have shown that the housing market in the UK has hit the biggest slump since records began in 1998, and things could get worse before they improve with Britain’s Brexit strategy still unclear.
Buying a house is still seen as one of the most sensible investments out there but is it wise to enter the market at this time?
A lot of people believe that it is best to wait and see what happens with the European Union before making such a huge investment.
Here, we examine trends in the area and assess what the local realtors are advising.
House Sales Most Negative Seen For Twenty Years
The Royal Institute of Charters announced last month that surveyors’ expectations for house sales in the coming month are the most negative seen for twenty years, since it began taking records in October 1998.
While there is uncertainty over what kind of deal Britain will make when the country leaves the European Union, it seems that people are hesitant about making big investments.
In December, new buyer enquiries in the housing market fell for the fifth month in a row. At the same time, there was a decline in new properties being made available for purchase.
Last year, The Guardian reported that there were numerous residential developments cropping up across the UK with little to no affordable housing. This included an
astonishing 14,667 homes in Manchester in 2016-2017.
None of these were considered affordable. While the Lancashire city was the worst, across the country things weren’t much better.
3.4 percent of houses built in Leeds were considered affordable, 1.4 percent in Sheffield, and 3.8 percent in Nottingham.
These figures make grim viewing for young people who are looking to get on the property ladder.
Why Buy A House?
Buying a house has long been considered one of the best investments that money can buy.
Two decades ago, 46 percent of 25-year-olds owned their own property.
But according to a survey conducted by estate agents Savills for the Local Government Association in 2016, the figure had dropped by more than half to 20 percent.
Buying a house is still the dream of many but these numbers highlight how difficult it is becoming.
In a study of 3000 people from the US, UK, and Europe, Betway found that the number one ambition for lottery winners was to buy a house.
43 percent of participants stated this as their main wish, while only 1 percent said they would give money to charity.
There is certainly a heated debate over whether buying a house is a good investment or not, and this has been going on for years.
The argument for buying a house as a long-term investment is strong if homeowners can make gains between 13 and 15 percent each year.
There are also tax benefits to be had from mortgage reductions, which is another reason why buying a house is an attractive prospect.
For home owning to be worthwhile in terms of moneymaking potential, houses must be maintained and improved over time to increase their value.
The argument against owning a home takes into consideration how volatile the market has been in recent years.
After the financial crisis in the late 2000s, house values plummeted and now they are high again due to a housing shortage.
There are, without doubt, a number of factors that potential buyers need to consider.
What are the Best Areas to Look?
Despite there being a crisis in the housing market at the moment, there are still plenty of areas in the Greater Manchester area for buyers to look into.
It may be wise to wait until after Brexit to put money down on a place, however. According to Property Investments UK, there are seven key areas to look at in the North West for first-time buyers.
The experts in the housing market suggest that Salford is the best spot to search in due to the strong growth potential available.
The rental yield in a buy to let would be around 7 or 8 percent. South Manchester has also been touted as a good area but it should be noted that rental yields in this area are slightly lower.
Despite the housing market being in a bad way at the current time, realtors believe that, in the near future, things are to take a turn for the better.
There are many things to consider when buying a house, and it certainly isn’t something you can rush into.
When the market picks up again, Manchester is likely to be a prime spot for people wanting to get on the housing ladder.