In the last month we have attended and exhibited at two major property events in London, both of which experienced good attendance levels from property investors and landlords. Based on our own experiences and anecdotal feedback from other exhibitors, it would appear that the property investing marketplace is in pretty good health despite the many challenges it’s faced of late.
This certainly seems to be the case with the ongoing strength of residential property sales and data, according to the very latest RICS monthly report and others mentioned in our market news section inside this edition. The ongoing shortage of stock to sell and also to let out is continuing to exert upward pricing pressures leading to rising rents and sold prices.
And yet as we also report on page 7, almost 40% of agreed residential property sales are falling through as mortgage lending valuations are not matching the agreed sales price. In a fast rising market this is not that unusual but anecdotally it appears lenders and their valuers are being cautious. This should not be that surprising given the backdrop of the conflict in Ukraine, and the inflationary impact of rocketing fuel, food and energy prices and with recent rises in lending rates.
Some months ago, I made an observation here about looking to fix your mortgage debt and since then the rates for two and five year mortgages have risen. On page 29, you can read our news analysis to learn what Fitch ratings is anticipating for the UK mortgage market and the outlook for interest rates.
The content of this edition is perhaps a little less exciting than some we have previously produced as there are no tales of overnight success. Quite the opposite in fact for our latest update of the PIN Fund, which saw a sharp reversal in its fortunes. To paraphrase Isaac Newton with the law of gravity, what goes up at some point will come down. However, with an average annual return of 16% since 2014, this fictional fund is still showing a healthy return which reinforces that property should be viewed as a long term investment and not as ‘get rich quick’.
On page 15 our lead article looks at the implications for commercial property and evictions which has seen many tenants accumulating serious arrears levels. And on page 36 Suzi Carter offers sound advice to those considering the sector for the first time.
We also have some valuable contributions from Ritchie Clapson on page 26 where he outlines the all important aspect of ‘how to sell your development’. Given the tales of woe I have been hearing of late from some investors struggling to recover their funds, it’s a topic that some developers appear to need to learn more about.
This month’s location report on page 47 looks at the Greater Manchester region and prospects for investment. The city of Manchester has been experiencing a very buoyant economy and property market in recent years, but is now the time to look at the potential ripple effect towards nearby towns where the commute time is less than 30 minutes?