4 Macro-Economic Factors That Can Affect Property Prices
According to an article by RICS UK residential director Andrew Bulmer there are 4 factors affecting property prices which you can use to help you buy properties that will increase in value.
- Housing shortage:
We all know there is a housing shortage in Britain at the moment, every politician, pre-election reminds us this by donning a high viz vest & trying to lay a few bricks under the eye of a nervous assistant and a chuckling bricklayer. This simple supply and demand for housing stock directly pushes up the prices of properties. It’s the same with supplying housing stock to the Local Authorities and a contributing factor to the areas in Manchester where The House Crowd choose many of their properties.
- A growing city
As our investors know, The House Crowd’s core business is buy to let properties in Manchester.
The city is now one of the country’s buy-to-let hotspots. The city’s population has grown by 11% between 2001 & 2014 and with hubs such as the BBC at Salford’s media city it is probably the top relocation destination for businesses moving away from London. This strengthening market is of course music to our ears as far as both our single let properties and HMOs are concerned!
- Planned transport links and transport infrastructure
We all love to complain about traffic, especially in Manchester where the M60 seems to be getting more like the M25 carpark everyday. Over the next five years, £530M of government investment will be flowing into North West transport links these infrastructure improvements will eventually deliver improved connections to work and leisure destinations around the city. The improved transport hubs will again influence property prices once the improved infrastructure and connections are in place.
It’s well documented that in London, property prices within a 10-minute walk from Crossrail stations have risen even faster than average London property prices.
- Gentrification of an area
We all know about the ‘Waitrose effect’ where changes in urban community lifestyle and an increasing number of wealthier residents lead to increasing property prices. Most estate agents will tell you how the introduction of a Waitrose and the gentrification of an area suddenly turn a leafy suburb into the next place to be therefore increasing property values. In these locations undergoing gentrification, the average income increases. Poorer pre-gentrification residents who are unable to pay increased rents or property taxes find it necessary to leave.
RICS UK residential director Andrew Bulmer commented: “It comes down to the economy. London 30 or 40 years ago was a little bit grotty. As the city became wealthy and powerful that wealth rippled out.”
But if you are going to play that game you really need to get to grips with your local areas and understand what is making your city tick.
There is a concept called ‘the new build premium’. When a house has never been occupied it has an attraction to buyers. And that is logical, because a new house should be low maintenance. Once it becomes second hand, it obviously won’t attract a new build premium.”