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Douglas And Gordon Market Report

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Rental falls outstrip decline in sale prices. What’s going on?

Surely rentals are booming because no one has confidence in the sales market and even if they do, they can’t raise a mortgage? Well no, when the supply of property on the rentals market increases year on year by 92% and the City enters one of those periods when large numbers of people are ejected, the demand / supply relationship gets turned on its head. Overall, renting remains the preferred option, so the volume of transactions overall are increasing. However, the activity of the market is heavily skewed towards the lower end and, as a result, on average, there have been falls in the rental value of 4 bedroom houses across Douglas & Gordon’s 10 letting offices of 15% - 20% in the final quarter alone. In contrast, 1 bedroom rental values have fallen on average by around 5% / 6%. Average rental values in Douglas & Gordon’s areas have fallen 10.6% in the final quarter of 2008, bringing the total decline in the calendar year 2008 to 11.2%.

On the sales side

Average values have declined by a further 8.9% in the final quarter, bringing the annual decline in values to 20%. The peak of the activity in the sales market in 2008 was April, with a small spike at the end of November. This means that the normally prime months of May, June and September / October saw very little activity for reasons that will be pretty obvious to all readers.

“Averages are Averages”

As we have said many times before in our Market Reports, “averages are averages”. The ones quoted above are specific to Douglas & Gordon’s areas of operation. They are derived from a revaluation of a set portfolio of properties of different sizes, but of a standard condition and quality. They are useful to an extent if you are a property owner in this territory in a way that any national statistics quoted are comparatively useless. The properties being valued vary in size, but what they have in common is that they have no major snags i.e. they are not situated on busy roads, they are not basements, they are not a 4th floor walk up, and in a weak market such as we are currently facing, the price of properties with any kind of handicap will suffer more than those without.


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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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      • Even
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      • up 5%

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