Alliance Property Group: Market Review Q3 2022
Last updated: 8.17am, Sunday 11th September 2022
We look in detail on current economic, property and rental indicators, forecasts and the opportunities for investment.
by Gordon Campbell
September 2022
Through the headwinds that the global economy has and will have, there is always opportunities.
At Alliance we cut through the challenges and give you the solutions and opportunities to grow your property portfolio, wealth and income.
"If you want to achieve great results, find someone who’s achieved what you want to achieve, and then do what they do". - Tony Robbins
Despite the continuing property demand at all levels of the market for sales and rent, and a lack of open market supply to meet demand, we at Alliance offer you a unique and exclusive offering, with all our properties. They are all:
- Off Market and Below Market Value
- Unique and exclusive to only us and you
- Only the right properties that have had huge due diligence on them re sent to you
- In areas of strong capital and economic growth
- In areas of strong rental demand
- Most properties we now offer now are suitable for The Guaranteed Rent Scheme
We also support and share with you our 40 years of experience, proven track record, knowledge, and expertise as investors and landlords and have a like-minded top class power team around us.
We give you a One Stop Solution (even with bank account ad setting up a UK Ltd business!)
General Overview
- Her Majesty Queen Elizabeth II passed away on 8th September 2022 with a reign of over 70 years.
Her Majesty leaves behind an immeasurable legacy.
- King Charles III has been sworn in as the new head of the monarchy.
- Liz Truss is the new Conservative Party Leader and UK Prime Minister on 6th
- The UK economy remains strong despite global headwinds of inflation and cost of living
- The UK will support the most vulnerable with cost of living and energy costs.
- A nationwide package of support for all business and households to cap rising energy costs
- Nicola Sturgeon, the Scottish First Minister has had her yearly banging the drum on Independence. That will keep her dwindling supporters happy, but the Scottish people and majority are not interested in independence. A legal report is due from the Supreme Court that will deem it not legal anyway and no grounds.
UK GDP
UK overall inflation in Here is an update of UK GDP and comparison to our peers in the EU.
In short, following a bigger fall during Covid and start of Brexit, the UK has now caught up.
IMF 2022 GDP forecasts:
The IMF- International Monetary Fund- is expecting the following growth in 2022.
Turkey +4.0% Australia +3.8% Canada +3.4% China +3.3%
UK +3.2% Italy +3.0% USA +2.3% France +2.3%
Japan +1.7% Brazil +1.7% Germany +1.2%
Scottish Property Sales Market
The average house price in Scotland in 2022 is now over £200,000, having risen 13% since 2019.
The growth from 2019 to 2022 has been in locations such as Argyll & Bute (30%), Dumfries & Galloway (27%), East Lothian (24%), East Renfrewshire (30%), West Dunbartonshire (27%), the Scottish Borders (39%) and Inverclyde the highest at 44% (the area we have been focusing on in the last 3 years).
Demand and supply continues to show a gap between demand being registered by buyers and the available supply coming to the market.
Demand is currently up 60% on pre-pandemic levels compared to supply at 25%.
Given some of the challenges facing the market, as well as some alarmist press coverage, you could be forgiven for thinking the market outlook was fairly negative.
However, this is not the case and, as always, the specifics of a local market can be different to national averages and forecasts.
That is why we always ensure the properties that we offer you are always in the right area of demand, growth, and demand.
Scottish House Price Forecast
After a period of unprecedented market activity and demand, we expect the market to moderate but maintain positive price growth due to underlying fundamentals constrained supply and a still historically low lending environment.
UK Rental Overview
The UK has faced a persistent shortage of new housing, adding to soaring house-price growth, with many people being forced to rent for longer.
The number of households in the UK private rented sector increased from 2.8 million in 2007 to 4.5 million in 2017.
The UK will need nearly 230,000 new rental homes A YEAR to avoid a shortfall if the current growth in demand continues, according to a new forecast.
Private rented sector supply will have to increase by 227,000 homes a year to meet the demand for 1.8 million new households over the next decade, according to analysis by the consultancy Capital Economics.
Scottish Rental Market
The Scottish First Minister had announced on 6th September 2022 that there would be a temporary time where there would be a freeze on any rental properties in Scotland until March 2023.
The detail of this is still to be confirmed and if in fact it can legally be done as well.
We await the detail.
This is to help households with the cost of living.
Any properties that Alliance sell are always rented at the current market level of rent of that property and area.
Properties that we sell for The Guaranteed Rent Scheme are at the right level of the property combined with the huge benefits the scheme offers.
Rental Demand in Glasgow and Metropolitan Area
The continued growth in the Glasgow and Greater Glasgow areas economy 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.
Time to Let is currently at its lowest level in recent years, at 16 days in Edinburgh and 14 days in Glasgow.
The cost-of-living crisis looks to be hitting tenants more acutely, with ONS figures revealing more rental households reporting issues meeting housing costs.
Further PRS and short-term let regulation may further restrict options for landlords, which may exacerbate the longer-term trend of falling supply and decreased housing choice.
The rental market in Scotland has experienced a tumultuous past two years.
For some landlords, the combination of tax changes in the sector, increased and increasing regulation, and a strong sales market encouraged them to exit the rental sector, leading to a decline in supply.
Time To Let (TTL)
High demand and low supply once again kept Time To Lets (TTLs) low, averaging 14 days.
Summary
There will always be challenges in the world and in the property market but that also creates huge opportunities.
At Alliance we cut through the challenges and give you the solutions and opportunities to grow your property portfolio, wealth and income.
We are with you at every stage and beyond with our personalised service.
The property market is not as volatile as markets for other investment vehicles like stocks and crypto.
Being a landlord and buying and renting the right property at the right price and right location, combined with the assurances that The Guaranteed Rent Scheme offers, it offers a hands free property investment opportunity.
It does not get any better than that!
In a blog sent out in April, Is Now a Good Time to Buy Property?, the same message remains the same today.
Yes, it is a great time to invest as a landlord.
Whenever you are ready to talk about your property investing goals, send us an email and we can arrange to set up a call.
Alliance Property Group. Making a Difference
Thank you for reading