The press highlighted this week that estate agents have a significant shortage of property for sale on their books.  The national average stock levels per estate agency branch now stands at 42, with this sort of stock level likely to continue for the foreseeable future.  The reduction in available property for sale has come about from a combination of factors: many endowment mortgages will fail to repay the capital at the end of the mortgage, which has encouraged home owners to redirect finances into paying down the mortgage debt rather than trade up to a larger property; the 2008 recession ‘forced’ many homeowners into incurring credit card debt which, whilst they are currently managing the debt with the present low interest rate environment, it is discouraging such owners to move to a larger property and increase their debt (even if financially qualified to do so!), and as our population is ageing, thanks to a better standard of living and the advances of medical science, we are seeing older home owners staying in their family homes for longer, with many now using equity release schemes to access their wealth in bricks and mortar, where previously downsizing to a bungalow or ground floor flat within the same area was the norm.

These factors have acted like a ‘perfect storm’, colliding, coincidentally, at the same time but creating a shortage of property coming to market, compared to decades earlier. This shortage of stock is not only creating competition between agents, but also competition between buyers – with the increased demand driving prices upwards. Hence, we are seeing multiple viewings and multiple offers on many properties, especially those properties which are in demand from buyers who ‘need’ to move i.e. young families, and first time buyers eager not to miss out on the benefits of capital growth in bricks and mortar.

The same level of demand should theoretically not be seen in the investment market i.e. buy-to-let and student rental property, where the ‘driver’ is the investment return on capital expended (i.e. yield) rather than a desire to settle down in a new home. With recent changes to the taxation system we should, in theory, have seen demand in the buy-to-let sector waning. In fact, the opposite is being experienced. From my direct sales experience, and my recent conversations with investors and my contemporaries in the industry, it would appear ‘Brexit’ may have a part to play in this. London and the south-east is experiencing a decline in demand for property across all sectors with, I am told, having been lost off the value of some properties in the past 12 months. Investors who have been active in the London market are clearly disinclined to maintain their investments in the capital with such losses already incurred, and the prospect of more to come, and many are looking at other areas of the country in which to invest; Leeds being a prime target in view of its prominence in the north, and the relatively attractive property values compared to other major cities. With large amounts of capital sitting in bank accounts earning 2% or less, an 8% yield on a prime student investment property in Hyde Park or Headingley is clearly going to be very appealing.

Although Moores have an above-average number of properties available our stock level remains lower than it was back in the noughties. The number of buyers registered with us however continues to rise. We know that only around 50% of buyers now list their property requirements with estate agents, many relying on being notified about new listings view the property portals email alerts.

Should Brexit produce an even more negative attitude in London and the south, it would appear the Leeds property market may well benefit from this. As with all political and economic change, there are winners and losers!