Welcome to the first quarterly update of 2022.
With house prices rising at the fastest rate since 2007, the UK property market remains resilient amidst wider economic uncertainty.
Demand is high with average home prices rising by +8,1% in the year to March. It’s been a busy start to the year with sales agreed in Q1 more than 30% higher than pre-pandemic levels.
The localised nature of the market is demonstrated at city level too, with Liverpool (10.3% increase) and Manchester (9.2% increase) leading price growth among the UK’s largest cities over the past five years.
The pandemic impact on affordability explains the current trend in price growth in property investors more focused on the North of England, where the average house price is a lot more affordable than London and buy to let investors are benefiting from better yields and returns. We are also seeing a high demand for commuter belt towns and regions around London where home prices are more affordable as affordability is playing a big factor, however professionals are still seeking easy access by train into London for work.
Another factor to consider for many buyers when it comes to affordability is mortgage interest rates which have already started to rise after the recent increase in the bank of England base rate to 0.75%. This will push up the cost of borrowing, which has created demand amongst buyers looking to lock in what is still record low borrowing rates.
The current window of strong buyer demand will lead to higher levels of activity in the short term. New build developers are also having to factor in acute rises in inflation so we are seeing a higher demand in developments which are already underway where investors can benefit from cheaper prices from previous build cost. Many new schemes will have to factor in inflation on build materials.
It’s been an exciting start to the year for Fabrik Invest as we have partnered with some of the UK’s leading developers in Birmingham, Manchester and Ashford in Kent, all strategically positioned in areas of growth and regeneration with good transport links. We are also pleased to be able to introduce other types of buy to let properties with a number of deals secured on freehold houses, HMOs and Buy to Flip opportunities.
We have recently completed on Bishopgate Gardens in Preston where tenant demand has been high. These apartments are being professionally managed by Heaton Group lettings. The Roscoe Residential apartments in Liverpool are progressing well with completion due to take place in June 2022 along with a number of other projects in Birmingham, Kent and Manchester which are all well underway and on target for completion imminently.
Finally, it’s been an exciting quarter for Fabrik Property Group and our selected partners, with sales in flagship developments such as Michigan Towers in Media City going well as investors are taking the opportunity to choose the best apartments and secure the best possible deal early on.
To date we have built a strong track record of developments both completed and underway which gives me absolute confidence in our team and our thorough due diligence procedures.
For the entire team at Fabrik Property Group across our UK and global offices, thank you for being a valued part of our investor community and we wish you all the best to you and your family.
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