PROPERTY MARKET UPDATE
December
21 DEMBER 2022
2022 a record-breaking year
2022 was a year in which we saw record breaking price growth in the UK property market leading to a two-and-a-half-year growth number of 24%! As we went to press, the latest figures released by the UK ONS showed that asking prices were up 12.6% in the 12 months to October 2022, with the average cost of a London property now £542,000. The ONS also reported that transactions in October 2022 were 3.8% higher than those in October 2021.
At the same time, the latest figures from the Consumer Prices Index hinted that the rise in UK cost of living prices may have spiked and now be easing; falling to 10.7% in November from 11.1% in October. The latest news out of the Bank of England seemed to confirm this, supporting a slowdown in the pace of rate rises; the bank’s monetary committee raising interest rates by 0.5% to 3.5% on the back of their 0.75% rise in November.
As we know, data varies depending on the reporter. Halifax, the country’s largest mortgage lender, released data that showed an annual rise of 4.7% between January-November. Director of Mortgages Kim Kinnaird commented, “Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels.” Whilst Rightmove’s figures showed asking prices up 5.6% on last year.
The biggest gains, of course, have been in the rental market where we have seen unprecedented growth; the demand for rental homes jumping by a quarter in the year. The present conditions in the London rental market have been described as “extraordinary” with record levels of renters entering the market. We saw increases in rental prices of 6% in Central London and Manchester and 5% for Birmingham in 2022 - all key locations for RPA investors and tipping the UK ever-more towards being a majority tenanted property market. In 2003 the UK homeownership rate was 70.3%, in 2022 it is 65%; a figure that drops to 30% amongst the millennial and younger generation age categories.
OUR MOST POPULAR INVESTMENT IN 2022 WAS…
RPA’s most popular investment this year was in Scholars Quarter in Birmingham – in which a total of 61 units were bought by RPA investors. Those who bought will no doubt be buoyed by the latest figures released by JLL which predicts a rental price rise in Birmingham of 3.6% between 2023-2027 and price wise, across the same period a predicted rise in Birmingham of 19.2% - far outstripping the UK average expected rise of 8.9%.
This is great news for our buyers – and also an opportune time to announce our first UK launch of 2023 will be Scholars Quarter sister development, Tyndall Court. Watch this space in the new year.
Honourable mentions must also go to Hayes Village from Barratt Homes with over 30 units sold this year, The Triangle in Kent with over 25 units in 2022 alone and our latest site in Brighton & Hove – Goldstone Apartments – which has had a fast start since launch.
WHAT WILL 2023 BRING?
Whilst 2023 is likely to be a more challenging year with the likelihood that prices may fall in areas that are overly catered for or perhaps overly expensive, there are still areas that according to JLL's most recent report will hold value and even see growth next year whilst the long term predictions for London and other major cities remain extremely strong. Coupled with the benefits of an extremely bullish rental market in which growth is showing little signs of abating there remains opportunity and reasons to buy.
In response to this we will continue in 2023 to be as analytical and careful as ever bringing you exclusive access to the best available stock in the UK market in areas that still work from an investment standpoint.
Over the course of 2023 we at RPA expect to bring new markets and new asset classes within property to the table as we endeavour to provide our clients a diverse and solid range of options to compliment your existing portfolios.
WISHING ALL OUR CLIENTS AND FOLLOWERS A HAPPY HOLIDAY SEASON
All that remains of 2022 is for us to wish all of our clients a happy and healthy holidays – and we look forward to speaking in 2023.
ABOUT THE AUTHOR
RICHARD BRADSTOCK
Managing Director
RPA’s founder, Richard has worked in residential development investment for 20 years and oversees the general running of the business ensuring the RPA Group retains true to its founding principles. Over his career Richard has built an incredible network of international property investors and like-minded industry professionals. The RPA Group was born out of a duty of care to provide property investors with an industry-leading and integral service, one that connects investors with quality and desirable investment opportunities, whilst providing reliable and trustworthy market commentary and analysis alongside, enabling investors to make the best, most-educated decisions for them.