At this stage in the coming economic downturn, it is too early to say with any certainty what the medium term impact will be on the Bristol housing and BTL market.
This will become clearer over the next few months but in this edition we will focus primarily on the current situation without referring to forecasts that might prove to be unreliable (or just plain wrong).
Much depends on how the government’s economic aid package is sustained and enhanced. Despite that there will be job losses and some companies will go out of business.
However Bristol’s strong and diversified economy is resilient and our city should emerge from the recession in a good position to return to economic growth.
As previously reported year on year house prices in Bristol have held up better than most other cities in the UK with a year on year increase in May of 2.7% (Source: the Zoopla House Price Index), placing Bristol 6th in the league table of the twenty cities in the index and above the UK average of 2.1%.
Zoopla also publish an analysis of year on year house price increases by post code. This was the subject of a recent article in the Bristol Post and it made for interesting reading.
Here are some of the highest increases by post code.
- BS1 (Central Bristol) 3.7%
- BS2 (St Pauls, St Werburghs and Old Market) 3.4%
- BS9 (Sea Mills, Sneyd Park and Henleaze) 3.5%
- BS10 (Henbury, Southmead and Westbury on Trym) 3.7%
- BS4 (Knowle and Knowle West) 3.6%
For BTL investors looking to buy, possibly at a price significantly lower than the asking price, these areas could be the places look.
Turning to rents, most commentators take the view that market rents will hold up well in the economic downturn, partly because some renters who want to buy may not be able to because of job insecurity.
In the first quarter of 2020 the Rental Index published by property analyst company Hometrack found that at 5% Bristol had the second highest year on year annual growth in rent of all the major cities in the UK.
The main problem for landlords and BTL investors is likely to be rent arrears because of a fall in income for tenants. In that case it is important to negotiate with tenants to achieve a reasonable outcome for both parties.
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK in the light of Covid-19 at our next PIM.
We’ll be arranging this when safe and practical to do so.
Meanwhile, stay safe.