Alliance Property Group: Market Review Q4 2022

by Gordon Campbell

December  2022

This year a lot has happened.

The global economy has faced a tumultuous year.

But, despite all the negativity we’ve seen, the property market remained stable in Glasgow.

Estate and letting agents in Glasgow continue to see demand outstrip supply and remain above 2019 levels, with premiums over Home Report still being achieved in many markets.

At times of uncertainty, especially following a period of buoyant housing market activity, it is a national pastime to predict ‘a house price crash’ or ‘market collapse’.

Although such forecasts tend to be highly inaccurate, they still garner screeds of coverage, probably because they act as very effective clickbait.

The media has certainly had a field day and the coverage has been very extreme too - picking up the energy crisis, food prices and mortgage rates and throwing the negativity out there like its the end of the world.

The media do have a lot to answer for in proliferating fear through sensationalised reporting in my opinion.

It's not all doom and gloom as the media enjoy portraying. 

So, what is happening?

House prices just kept on rising in 2022, shaking off any short-term pessimism.

Across all property types, average prices in the UK rose from £274,073 in January, to £294,599 in September, according to Land Registry data.

In October, Halifax had the average house price at £292,598.

Certain property types are also seeing plenty of interest from investors.

Even with all the dire headlines we’ve seen in the press. New builds are flying off the shelves in regions such as East Midlands, the West Midlands, Scotland, and the East of England.

What’s more, pent-up demand has pushed property investment in London to £2.8bn. The highest amount seen in 7 years. 

Across the UK, JLL found annual investment in the living real estate sector exceeded £10bn in the 3^rd quarter of 2022, putting it on track for a record year.

And let’s not forget, all this demand occurred in a state of constant UK and global headwind challenges.

Scotland

When accounting for inflation, the recent price increase is less acute than previous housing bubbles.

For this reason, it is not anticipated that the market will see the same price correction as previous cycles

Inflation

Inflation in many countries in Europe and the world remains a challenge.

Inflation in the UK is sitting at 11.1%, while the base rate reached 3% in November. 

Fortunately, the worst of all this may soon be behind us.

The Glasgow Rental Market

The Scottish property rental market has experienced a 65% reduction in available stock to let in a single quarter, due to a surge in demand.

Demand for rental properties in Glasgow and its urrounduing areas are at anall time high.

This is due to the long term local economic growth in Glasgow and its metropolitan areas as highlighted in detail in a recent blog.

http://allianceproperty-group.co.uk/items/news-section/Alliance-Property-Group-Market-Review-Q1-2022

Demand was across all property types and sizes, with additional late demand from students returning to their university cities for in-person learning.

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

The cost of ownership is now higher than the cost of renting and will likely disincentivise some buyers from entering the sales market.

Summary

Thank you for reading.

We hope this blog has been helpful for you.

Property without a doubt remains the world’s best class asset for medium to long-term investing despite the highs and lows.

That along with the unique and exclusive off market and below market properties that are in the right area, with the right demand for sale or rent and in an area of strong capital growth gives you the leading edge on any other investor.

You are in safe hands with us.

If you have not spoken to us since being introduced and you have any questions you would like to ask in how we can help you get started or continue to build your portfolio, please contact us.

It could be the best decision you make in building your property portfolio.

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