Our focus is obviously on the Rotherham property market and when we live in our own homes or only own buy-to-let properties in the local area, it’s often easy to forget the regional and national picture. As a homeowner or landlord in Rotherham, consideration must be given to these markets, as directly and indirectly, they do have a bearing on us in Rotherham. We’ve written this article in order to compare the Rotherham property market to the wider Yorkshire & Humber region, as well as the national market.
Locally, the value of property in Rotherham and the number of people moving remains largely steady overall. However, looking across at the different regions, there are certainly many variations. Talking to fellow property professionals in the posh upmarket central London areas of Mayfair and Kensington, the number of people looking to buy and registering interest with agents is continuing to climb after 18 months in the doldrums, whilst in other parts of the UK, there is restraint amongst both buyers and sellers.
The things that impact the national property market are the big economic numbers. Nationally, over the last few months, the economic forecast and predictions have improved – thankfully! But this is notwithstanding the Brexit uncertainties. Inflation has mercifully throttled back its high growth seen in 2016 to the current level of 2.1% (from 2.7% average last year), coupled with marginally stronger wage growth at 2.5%. Unemployment is at a 42-year low at 4.2% and UK consumer spending power rose to an all-time high last month to £331.04bn – all positives for consumer sentiment.
Looking further afield, a resilient property market depends on the UK’s economic health with the outside world. If our currency weakens, imports become more expensive, meaning inflation increases. I talked about this a few weeks ago in my last article. Interest rates could be raised to bring inflation under control, which in turn could have a serious impact on the property market. On the assumption Brexit negotiations are successful, economic growth should continue to be upward and positive, meaning confidence would be increased… which is the vital element to a good housing market.
How has the housing market performed over the last 20 years?
Looking closer to home now, Rotherham landlords and Rotherham homeowners might be interested in the how the regional and Rotherham markets have performed over the last 20 years (compared to the national picture). Let’s look at the regional picture first:
Yorkshire and Humber has outperformed the Rotherham housing market by 7.34%.
the country has outperformed the Rotherham market by 8.3%
I found it interesting to see the ups and downs of the Rotherham, Yorkshire and Humber and national markets in the graph below. Points to note include:
- How the lines of graphs roughly go in the same direction, with Rotherham following the regional trend more closely than the national trend to a certain point (as one would expect)
- How the 2007/08 property crash timings and effects were slightly different between the three lines
- How the property markets performed in the post-crash years of 2011 to 2014
So, what does this all mean for Rotherham homeowners and Rotherham landlords?
Well, house prices going up or down are only an issue when you sell or buy. In the last 12 months, only 1,076,288 properties changed hands out of 27.2 million households in the UK in 2017, meaning only 3.7% would have been affected if property values had dropped in the last year.
Property values in Rotherham are 214.15% higher than the summer of 1998
Yet this has been a long-term gain. The number one lesson in property is that it is a long-term game. The biggest issue in property isn’t house values or prices … it’s the number of homes built, because the number of households nationally has only increased by 6% since 2007, whilst the population has grown by 7.6%. That doesn’t sound a lot, until you express it another way… If the UK population had only grown by the same percentage as the percentage growth in UK households in the last decade, there would be 1,000,000 less people living in the UK today.
The final thought for this article is this: apart from central London, over the last 20 years it hasn’t mattered what part of the UK you were in with regards to the property market. Whether you are a landlord or homeowner, property is a long game. Therefore, look long term and you will win because until the Government start to build more homes, demand will outstrip supply for owning and renting!
As always, if you have any questions, please do not hesitate to get in touch. I’m happy to offer my advice over a cup of Yorkshire tea!