Our regular Bristol and UK property reports are written by economist Chris Worthington, who is a regular speaker at our PIMs.
The housing market and the rental market are both driven by the economy, so this month the Bristol buy to let update will start with an overview of economic trends.
The latest quarterly economic outlook published by global accountancy group KPMG reported the following findings:
- Bristol’s economy as measured by Gross Added Value (GVA) will shrink by 9% this year as a result of the corona virus pandemic, but should recover rapidly in 2021.
- Bristol’s economic recovery in 2021 is forecast to be 8.4% of GVA, higher than the average for the UK
- However this relatively optimistic forecast could be downgraded to just 4% if the UK fails to negotiate a trade deal with the European Union and developing a vaccine for Covid – 19 is delayed.
How will this impact on the housing and buy to let (BTL) market in Bristol?
In the latest UK House Price Index published by Hometrack, Bristol is placed 9th in the league table of house prices for the 20 cities in the Index, with a year on year increase of 2.9%.
The rental market in Bristol also looks buoyant.
A recent report published by Bristol based property consultancy company CBRE found that demand for rented property in Bristol one of the highest in the UK. This has led to investment in “Build to Rent” developments in the city, most recently at Box Makers Yard in the Temple Quarter Regeneration area. It is funded by Legal and General and will deliver 376 homes for rent.
Further evidence investor confidence in the Bristol is at the Brabazon development on the site of the former Filton airfield in South Gloucestershire. This will provide a range of one and two bed apartments and three, four and five bed houses with public parks, community facilities, a new transport hub and the Arena Complex.
Bristol’s economy continues to perform well providing high quality well paid jobs that underpin demand in the housing market.
However there are dark clouds on the horizon with the possibility that economic recovery will be slower than a quick “V” shaped recovery and will be prolonged into mid – 2021 or longer.
Fortunately for BTL investors the housing market is relatively resilient compared with other sectors of the economy. Bristol will survive and thrive and the leaders of our city and the business community are rising to the challenge.
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.