Nottingham’s property market has boomed over the last decade. According to figures from the Office for National Statistics (ONS) there’s been a rise in property prices of nearly 39% which have driven by over 100,000 sales. The rental sector has also enjoyed a period of strong growth and the average rent now stands at £1,129. This surge reflects a general buoyancy and optimism in the wider Nottingham economy which, thanks in-part to the burgeoning tech and creative sectors, has driven demand for housing through the roof.
As a business we are highly attuned to the local property market. Since founding Coversure Nottingham back in 2004, we’ve become well-known as property insurance specialists. From home cover to landlord insurance, commercial property and holiday homes to unoccupied properties, we’ve made protecting your property our business.
So, as a new decade gets underway, we thought we’d take a look ahead to what the market may have in store in this brave new Brexit world. And do you know; there’s plenty of reason to be optimistic…
Post Brexit Boom?
The property market is like the business market in that if there’s one thing it can’t stomach its uncertainty. Brexit has obviously served up huge loads of uncertainty over the last four years. From the ‘Will we, won’t we?’ of the referendum to the ‘Will we, won’t we?’ of the resulting years of political impasse, it’s been a tough time for all.
2019, as we reported in our recent blog on what 2020 holds for Nottingham, was a year many property owners and investors may wish to forget. The ONS, said prices for detached homes fell by 14% year-on-year in September, while flat price dipped by 18%. Prices of for semi-detached and terraced homes fared better, rising by 4% and 1% respectively and things did rally in the last quarter so the year wasn’t quite the disaster it might have been. Indeed, we can now see that, that reversal of fortunes in the last quarter may actually have been a precursor of better things to come.
Now that we have officially left, the good times in the property market look set for a slight return. The Halifax, Rightmove, Zoopla and EY suggest that 2020 will see city property prices rise between 2-4%. In London agents are already reporting a surge of buyers and interest at a 15-year high. What seems to driving demand is a combination of relief that the uncertainty is over (for now at least) and movers and investors deciding to take the plunge.
There are, however, some reasons for caution. EY’s Item Club feels that a no-deal Brexit could yet scupper growth and could in fact lead to a 5% drop in prices. While we have technically left, 2020 is a transition year and we won’t really see what life is like outside the EU until 2021. If that life is to be led without a deal with our closest and largest trading partner that is bound to cause problems. Both sides are talking tough at the moment – you’d expect nothing less at the outset of a negotiation – but equally both sides know it’s in their interests to get a deal.
The other related issue is the state of the global economy as a whole. China’s economy is slowing and the awful Coronavirus is expected to cost it $60bn in the first quarter alone. This will have a wider-region impact and could stymie property investment growth locally.
On the brighter side, the ending of the China-US trade war with the announcement of a trade deal last month should make a big difference. Both sides have been hurt and that has global ramifications. Then there’s the chronic shortage of property in this country. The government has identified a need for 170,000 private and 75,000 social homes to be built in the UK each year. While they are planning to invest more – especially in the midlands and the north – private investors are the ones who will provide much of the funding and there does seem to be an appetite to do so.
Rental Demand To Remain High?
Nottingham has an extremely young population. The median age in the city is just 30 years of age – the UK’s is 40. The reasons for this include having 75,000 university students plus a legion of young nurses, doctors and other medical and clerical staff at the University Hospitals NHS Trust which directly employs 13,600 people. Add on to those the vast numbers of young people – 20,000 in 2017 – who work in the Creative Quarter and Nottingham’s £1.3bn digital sector and its easy to see why we have such youthful demographics.
Youth has its advantages; but for many the idea of owning their own home is something for the longer-term. Demand for rental property is extremely strong in our city with growth rising by 4.3% in 2018 and 5.4% in 2019. Rental developments are going up everywhere and more are planned. There’s the proposed £650m re-development of Boots Island, Jensco’s development of student accommodation between Traffic Street, Waterway Street West and Sheriffs Way which will provide room for up to 523 students and also smaller re-developments such as the conversion of old offices in New Basford.
As we have said the government is also planning a property splurge. On the 29th January they announced a £1bn fund to support small house builders and they have pledged billions more for social housing in the midlands and the north. This is all welcome news, but the fact remains that these projects will take years to complete, leaving many needing rented accommodation for the foreseeable future at least.
What Does 2020 Hold for Nottingham’s Property Market?
Nottingham looks set to have a great start to the new decade and property owners – both home owners and landlords – can expect a much more prosperous year than last year. The outcome of the Brexit trade negotiations could cause turbulence later in the year – especially if we look set for a hard exit – but even that could be offset by a strong domestic economic performance and the forging of new trade deals elsewhere. Nottingham’s economy has fared well of late and with and more people settling in our young, vibrant city, the outlook is good. We’re certainly readying ourselves for another big year of landlord insurance quotes!
Here’s to a booming 2020 in Nottingham!
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If you’d like some help protecting your property assets to you, then please call the Coversure Nottingham team on (0115) 837 5592, email the Coversure Nottingham team or click here to start a quote.