Your Detailed Alliance Property Group Market Review: Q4 2021

Last updated: 4.04pm, Sunday 2nd January 2022 by

We look in at the current UK economic and property market review for Q4 2021, and in detail for Glasgow.

by Gordon Campbell
December 2021
 
    • The UK and Glasgow economies remain resilient:

             UK growth of 6.5%.

     

    • Growth of 7% in Scotland and forecast of 10.5% in 2022

     

    • The Glasgow and surrounding area sales and rental market continues to be in   very high demand:

             12.3% in last 12 months
     

    • Our main focus areas is one of the highest capital growth areas in the UK:

              Inverclyde has annual 13.9% increase.

     

    Covid Update

    A lot has happened since 23rd March 2020 with the last 20 or so months having been challenging to say the least since the first lockdown!

     

    But it does now seem like we are entering a “new normal” in which humanity will learn to live with Covid.

    The UK has high number of daily reported cases of the new variant.

    The UK has a very strong testing regime in place with the UK testing more of the population in a month than the whole of Europe, hence why UK numbers will be higher.

    The population with both vaccines is at over 94% and the booster is at nearly 70% now which is helping to keep hospitalisations and deaths low.

    The challenge is going to be the effect on business and the supply chain in dealing with the number of positive cases and the isolation period for those testing positive.

    This has affected some of the timescales of the refurbishments we do in taking slightly longer. All clients have been advised and being kept updated.

    We are working tirelessly in the background to ensure we still provide our first-class service.

     

    UK Economy Review

    Although the UK economy contracted by almost 10% last year it now seems to be on course to grow by 6.5% this year (source Office for Budget Responsibility) which is the fastest rate of growth since 1973 and higher than any eurozone country.

     

    This represents a far better forecast when compared to the previous prediction of 4%.

     

    Inflation is likely to affect things going forwards, the Bank of England (BOE) are
    forecasting it could rise to over 5% next year before falling back to its target of 2% in 2023.

    Thus, there is likely to be pressure to raise interest rates and rise of the cost of living will potentially dent consumer confidence.


    The result is we believe the market in 2022 will slow gradually but do not much there are several economic factors that are supporting the market and preventing any dramatic falls

     

    UK Property Review

    For the residential property market over the 18 months from March 2020, annual transaction levels hit 1.55 million in the year to September 2021 which equates to 30% more than the 2017-19 average (source: Savills).

    • The average price of a property now stands at £342,401

    • Recent figures released by the Office of National Statistics (ONS) Average house prices increased by 8% over the year to September, up from 10.2% in August.

    Scotland Economy Review

    There is evidence that business confidence is returning partly due to the
    success of the vaccination programme and restrictions easing.


    Monitor, from chartered accountancy body ICAEW they report that confidence is at the highest level since the survey began in 2004 with an index reading of +42.2.

    The result is the economy should bounce back more quickly than previously anticipated with The Scottish Fiscal Commission (SFC) forecasting GDP growth to return to its pre Covid level by the second quarter of next year.

    The SFC forecast GDP growth of 2% in 2021 and 10.5% in 2022, with a return to a pre-Covid sized economy in 2024.

     

    Glasgow Property Review

    • Like the national market the Scottish residential property market has also proven to be resilient.

    • Registers of Scotland report that prices in Scotland increased by 12.3% in the year to September 2021.

    • The average price of a property in Scotland now stands at £180,334.

    • Scotland house prices were growing faster than the UK annual rate of 11.8% in the year to September 2021.

    We believe the outlook remains positive, the number of agreed sales in Scotland increased by 35% between July and December 2020 when compared to 2019.

    It also appears that this momentum will continue into this year 2022.

    Savills report that agreed sales are 13% higher than those recorded before the pandemic hit.

    • They forecast price growth rates in Scotland of up to 5% in 2022.
    • 5% in 2023 and 2024
    • 4% in 2025

    The UK Rental Market

    As mentioned, demand levels remain high while at the same time there is a constriction of supply, we expect this situation to continue into 2022 which will mean upward pressure on rents is likely to continue in the short term.

    The RICS report that near term rental growth expectations remain elevated, as a net balance of +54% of contributors anticipate rents rising over the coming three months.

    Glasgow and Surrounding Areas Rental Market Review

    • Rents have increased in all areas of the UK apart from Aberdeen.
    • Glasgow had the highest growth at 7.2%.

    Rental Demand in Glasgow and Surrounding Areas

    The continued growth in the economy in Glasgow and surrounding areas and with more people looking to rent, demand for rental property has been booming.

    That is combined with lower stock availability for properties due to the immensely strong on market sales demand from buyers.

    In the RICS (Royal Institute of Chartered Surveyors) residential market survey tenant demand levels in Scotland are second only to London.

    The result for the rental demand in Glasgow is the time to let (TTL) numbers have reduced dramatically down 14 days on average
    Scotland wide.

    Summary

    As the above and previous reports, we have done (that can be seen in our News/Blogs page http://allianceproperty-group.co.uk/news-section/News/ , house price forecast for 2022 is looking likely to be another fruitful year for property investors.

    We have successfully helped over 1000 investors secure investment properties.

    We are constantly focussed on ensuring our clients benefit from the best possible returns from their investments, whilst ensuring their regulatory and legal are met and their risks are minimised.

     

    What we do for you is unique and exclusive.

     

    We provide you a One Stop Solution:

    • strong and constant supply of off marketand below market value properties

    • price range on average of £25,000 to £40,000 so no ADS tax paid.

    • Properties in areas of the highest capital growth and tenant demand.

    • We share our 38 years’ experience, knowledge, and expertise as proven and award-winning landlords and investors.

    • We share regular, detailed and quality market information and blogs

    • Access to a great power team: solicitor, letting agents, refurbishment teams, accountant, and finance brokers.

    • High quality of service and communication and ‘hold your hand’ at every stage.

    • Building long term relationships.

     

    If you’re considering investing in property or require some extra guidance and have not spoken to us, we can help.

    It could be the best decision you make in 2022!

    We have a proven track record of success, and we can guide you through the property market.

    Regardless if you are a new or experienced investor what we provide is for everyone.

     

    If we can help in anyway or want to discuss anything just contact us and we would be delighted to help.

     

    Thank you for reading, Happy New Year, best wishes for 2022 to you and your family.