During the pandemic, there has been unrest within the property market, seeing the recent growth of the market take a downturn – but 1.7% fall in growth isn’t a disaster. With new motivation, it has caused a massive surge in rentals.
Year on Year Growth slump in residential transactions
Comparing year on year figures is somewhat unfair. The property market has historically always been resilient. Still, the global issues have caused uncertainty, resulting in a decline in residential transactions vs 2019 by 53%. There has been a sharp economic contraction because of the pandemic, causing people to become more frugal based on their current incomes. This has meant that fewer people are looking to purchase something as significant as a property. The Heaton Group have continued to buy new property throughout the pandemic – securing funding across our new sites and continuing to work as usual.
This statistic, however, is only based on mortgage purchases, cash purchases have continued unabated, and as such, there have been significant advantages to being an investor or having more fluid finance at this time. Property prices are due to increase too, so taking advantage of a down market has been a wise move from savvy investors.
Things were on the up and will continue to be
Before the pandemic, UK property prices were steadily rising. Given the recent news that Brexit deals had been struck, the security of a defined UK government for the next five years and with robust labour market conditions and lowered borrowing costs – property prices were increasing. Behavioural changes given social distancing had also put people off viewings and scouting new properties. However, a relaxation of these measures has since seen The Heaton Group get a recent rise in enquiries as well as investors taking advantage of the current market.
Throughout May we witnessed an increase in traffic through our website too – suggesting that the market is due to return to normal. We recently sold out our Johnsons Square development, and we have sold over 80% of Stone Cross House, another development that is due to complete in the next week or two. For more information on this development, please visit the Stone Cross House page.
Rental Market sees a massive surge
As you’d expect with many people spending more of their time at home, those looking to rent a property has seen a significant upturn. Perhaps unhappy within their current confines or needing a break, we can see that there has been an increase in rental interests through our lettings agency HG Premier Lettings. There is also evidence to suggest that break-ups and job changes through redundancies and the like have created an increased demand for rental property. Below we created a table that shows the growth until the end of 2019 compared to those figures seen in 2009.
The sector is also dealing with a backlog of people who were planning to move during the lockdown period, as moving home was restricted. As such, there has been turmoil rearranging these plans or changes entirely due to job conditions. Landlords are now anticipating some of their tenants being unable to afford rent. They need more guarantees in place to ensure that their rents are paid.
The rental market seeing such a surge in interest was to be expected. It is currently struggling to meet demand, as properties listed are 4% down against April 2019, meaning that landlords are either secure or not listing and developers don’t have properties for tenants. This isn’t the case for The Heaton Group, however. We have apartments to rent in Bolton at Stone Cross House as well as meeting demand in Manchester over the next year by continuing our development into Stretford. The housing market will bounce back to pre-COVID levels and as it stands, given the fact house price growth has temporarily stalled, now would be a great time to make that investment.
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