The only way is up – property boom in a third of UK’s largest cities

A third of the UK’s largest cities are experiencing a property boom, according to research from leading letting firm Apropos.

It looked at year-on-year data to find the number of properties advertised for sale rose by between 1% and 40% in seven of Britain’s 20 largest cities.

Edinburgh saw the largest increase with 40% more homes available since last year. Bradford appeared at the bottom of the table, with 28% fewer properties compared to 2019.

There are almost as many double-digit increases in properties advertised as there are large decreases, with the remainder in between.

Apropos’ chief executive officer, David Alexander, says the figures both confirm and contradict the widespread expectations of market performances following the end of lockdown.

“With the relaxation of the stamp duty land tax (SDLT) threshold in England and Wales and a similar move in Scotland with land and buildings transaction tax (LBTT) there was expected to be something of a property boom as buyers sought to take advantage of the improved tax savings,” he comments.

“There was also a strong view that the market, after being locked up for so long, had produced pent-up demand which would be released as soon as people were able to move. Indeed, some of these figures reflect this with Edinburgh and London, in particular, bouncing back very strongly.”

The data also highlighted a wide difference in the average time properties spend on the market, with the shortest period in Glasgow at 99 days and the longest in Sunderland at 259 days.

Alexander adds: “The consequent increase in average time on the market in Edinburgh reflects this sudden jump in volumes which is making it harder to get sales through as quickly as before. Although it should be noted that Edinburgh is still one of the fastest places in the UK to sell a property.”

He says the areas which saw a decline in volumes are also those which have experienced high levels of infection and the subsequent lockdowns. For example, the North West, Yorkshire and the North East are the three areas with the largest decreases in properties being advertised for sale.

“This will have surprised nobody given that economic uncertainty always produces a faltering property market. If people are unsure about whether their jobs will remain, and this concern is exacerbated by continued lockdowns and restrictions on commercial activities it is clearly not the formula to produce higher house prices.”

“These figures show that the UK property market is experiencing widely differing performances in each area. This is perhaps not surprising, but the scale of the difference is quite marked and reflects the different experiences each area has had both during and after lockdown. The announcement of a workable vaccine may now make the position more stable in the more vulnerable areas, but it is clear there is still some way to go.”

Alexander predicts the return of the stamp duty thresholds will impact busier areas, although it is unlikely to bolster sales, and it is equally unlikely that there will be a ‘sudden slump’.

“Maybe a minor dip in the late spring reflecting a slowing in activity once the financial incentives have ended. Of greater importance will be whether unemployment is rising and if the economy is returning to normal,” he concludes.