UK real estates are a hot topic these days. After all, London property prices are still at a giddy 10 times the national average. Meanwhile, demand for three-bedroom houses outside of London is rising, and take-up of industrial space in the capital has dropped. The grocery sector has also seen a surge in home delivery, which has pushed prices up a whopping 12.4% year on year. However, the giddy trend is unlikely to last.
London property prices have remained above a giddy 10 times
The UK house price index is due for release on the 20 July, and it's predicted to rise by 9.7% in the year to June 2022. According to Rightmove, a property portal, average property prices have increased by 0.3% in June. This represents the longest streak of monthly gains in more than six years. Meanwhile, house prices in London have been rising at double-digit rates for 12 consecutive months, a record.
A report published by Rightmove revealed that, for the fourth consecutive month, UK house prices rose by an average of PS6,000 - up from PS5,800 two years earlier. In fact, 73% of the total UK property market will be chain-free in 2022, which Hamptons attributes to the growth of first-time buyers and investors. The record-high price rises have pushed up the cost of living for many British households.
Demand for three-bedroom houses outside of London
According to new research by Knight Frank, the UK property market is experiencing an 'unseasonably strong' first quarter in 2022. Home prices are up 8.1% year-on-year, driven by 'unprecedented buyer demand'. During the summer of 2020 and 2021, three-bedroom houses were the most popular type of property, but now three-bedroom flats are the preferred type. Potential buyers may be balancing the need for extra space with the cost of living in the area.
Peterborough is a modern city built around a historic centre, and offers the convenience of a large city with the country close by. Three-bedroom houses in Chatham started at PS110,000 just a few years ago, but prices have since risen steeply and are set to rise further due to ongoing regeneration projects. Meanwhile, some of the older areas of the city are undergoing serious gentrification, with new developers taking on Victorian terraces.
Take-up of industrial space has fallen in London
According to the latest quarterly analysis by Avison Young, industrial take-up in London fell by 40% in the first quarter of 2022. This is still well above the five-year average, but it doesn't reflect a fall in demand. This type of space is extremely popular and the critical lack of stock could hamper take-up levels in the year ahead. Here are the key factors to consider in this market.
In London, take-up of industrial space fell by 8% in Q1, despite the fact that online retail sales increased. Despite this, major players such as Amazon accelerated expansion plans, taking up 12.5 million sq ft in 32 deals. 3PL operators and distribution operators have also been active, particularly in light of structural changes. However, demand remains low in London.
Grocery sector has experienced unprecedented demand for home delivery
Despite rising consumer expectations for home deliveries, the UK grocery industry will face a challenge in meeting this demand. Due to intense competition, the grocery sector is facing low margins and price inflation. While shoppers may be keen to save money, they may also be worried about the quality of the products they buy. The low margins, however, are a major sticking point for traditional grocers when expanding their online offering.
With the introduction of the Covid-19 pandemic, the UK grocery sector has experienced unprecedented growth. The scourge of disease has forced grocers to change their shopping methods. The recent panic buying of food caused by Covid-19 has seen some stores implement elderly-only hours. These measures aim to protect elderly shoppers from the virus, which is caused by a novel coronavirus.
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