24th April 2018
I read with interest (forgive the pun) that inflation is down at 2.5%, below Government’s 2.8% target and it now looks as though Mr Carney’s planned interest rate rise will be put on hold. It’s no wonder the markets are volatile when we’re getting different messages month-by-month. There is no medium to long term planning applied to the management of the economy; it’s a case of ‘let’s do XYZ and see what happens.’ The increase in the inflation rate was predictable following the Brexit referendum. Currency bombed (as predicted) and London is reeling from not knowing what’s going to happen when we finally leave the union. With low interest rates, healthy economic output and the lowest unemployment rate this country has seen for many years it was inevitable the initial ‘panic’ response to the referendum outcome would settle down. I’m confident we’re in for a sustained period of low interest rates and low inflation and we need to get used to that fact.
As professional estate agents, we’ve always spent time analysing facts and figures relating to sales and lettings enabling us to provide supporting evidence when advising clients, both individuals and the corporate organisations we partner with. But with a rather modest portfolio of client’s property, our data samples have been smaller than we would have ideally liked. In March we introduced a new data analysis system which works not only from our own data, but data from all the agents in the area, as well as giving us access to national statistics. We can analyse data from sales or lettings specific districts of Leeds, such as Headingley or Weetwood, and now we can ‘drill-down’ to particular postcodes areas such as LS6 2 or LS6 3, or LS16 5, to give clients a myopic overview of their marketplace.
We can identify the mean, mode and median values, averages over the past 12 months, growth in sale or rental value over 12 months and 5 years, along with identifying the properties in greatest demand in specific areas – ideal when valuing for rent. For example, in LS6 2 (generally north of the A660 Otley Road) the average rent was £614 pcm net of utility costs, compared to £563 pcm in the previous 12 months. That shows a 9% increase year-on-year. The split between houses and flats was virtually 50/50. 63% of tenants were aged 18-29, with 37% of the rental market aged over 29 in this area – in fact the average age of tenants in new lettings in the past 12 months in this area was 30 years. 25% were aged 30-39 years, whilst 12.5% were in the 40-49 year age group. There were no new lettings to over-60’s compared to the national average of 6.5%.
On the sales side, in the LS6 2 area there were only 94 completed sales in the last 12 months. At 7.8 completions per month that’s 43% down year on year (no wonder agents are short of stock and demand is pushing property prices upwards!), and the average selling price was £189,719. This compares to the national average value of £235,151. Flats in this area have an average value of £148,787 compared to the average value across Yorkshire and Humberside of only £114,875.
We’re planning on providing specific analysis such as this for all clients when valuing their properties for sale or rent, and being able to track performance which will enable us to advise clients where to buy for investment purposes, taking into account both rental demand/growth and expected growth in capital values. As your local property experts this will only serve to strengthen our knowledge of the local market and is another reason to choose Moores when listing your property.