[Music] yes hello and welcome to the business of property podcast I'm Stuart and I'm Simon we've been finding buying and growing income from property for over 20 years and we talk every week about the reality of running our property businesses as always we would really appreciate it if you could just scroll down on your podcast player and hit the ratings button takes less than a second and uh it would greatly help us so please do do that uh as long as you're enjoying the show of course and we hope that you are and that's why you're here today's episode we are talking through the home track UK house price index and if it's something you would like to have a look at please again go down to the show notes in your podcast player or obviously uh if you're looking on YouTube we'll have that in the links uh because that that will help you have a look at some of the the the graphs that we're talking through and and give you hopefully a little bit more insights to to the things that we're talking about so please do do that if you're in a position to do so Simon in terms of summary do you want to kick us off in terms of what you've been looking at on the UK house price index yeah I think there are there I mean there's a whole collection of stats in here obviously and there's lots of different things that are are quite interesting we'll we'll pick out a few as we go along but of course the the headline one is price property prices are according to home track down half a percent year onye and I think particularly for me that that's interesting because it's it's a very small change but it is in contrast to most of the other indexes and price reports that I've seen recently from sort of Halifax and Nationwide they seem to be reporting very small but increases and and home track have come in at a very small but decrease um which which I think is is is different although that does break down quite quite regionally do you you want to cover that a bit St yeah and the F let's get it out early because we like to do that yes the we're not going to get into to the to the data um quality of of the different uh indexes and reports that we see but the first thing I would say is you know minus 0.5% in my world is is NE negligible at best so at the total level there is no news and I think I would just get that out nice and early so that so that we're clear but as you say Simon the most important thing for us when we're looking at it is is more regionally because we know that the the UK behaves in very very different ways you know you know obviously Northern Ireland is you know a separate land mass to us so you know that that could behave very differently but when we look at the overall picture and this would help if you if you've got a a view of the home track report where where you you've got an an image of the UK because what's very clear is the top half of the UK is green in terms of the annual uh increases but the bottom half is more red where we're seeing annual decreases and just to explain that so it's um to 12 months to the end of January you know com comparing the previous year so that is what it's looking at and when we look at it and we'll dig into this a little bit but for me it's it's basically from Nottingham down so we've got East Midlands east of England London Southeast and the Southwest uh you know particularly where I invest which which I don't always see because it's a very static area but all of that is red uh in terms of uh annual decreases so that I you know we we know Southeast but I found that quite interesting that it's quite Stark at this stage yeah quite I think it's it's so interesting you can kind of draw a line in the middle of the country and and the further north you go the the better things have been and the further south you go the worse they've been although this is reporting a a 0.8% fall in London and and that I think is actually slightly counter to to anecdotal information that I've seen so my my in-laws have been uh selling their their own home and and actually they sold it last year and they had some interest but not not crazy interest and they ended up having to take a slightly lower offer than they were hoping for and and unfortunately that sale after many months and lots of frustration did did fall apart but that meant obviously that they put it back on the market this year and and they had much much more interest they had uh 10 viewings booked within a week and from those viewings they they had multiple interested parties and those parties were actually bidding up the price and they have now accepted an offer that was over their asking price rather than one that is under their asking price so I think it's it's quite a big contrast from last year to this year and and maybe maybe the stats haven't quite caught up I don't know we'll have to see or maybe they just haven't recovered enough to to be reflected in year on-ear figures but something that is reflected in these these numbers which I think is is also in that that that story is that there's a lot more interest and a lot more activity in the market there are more properties on the market there are more people looking for properties and doing viewings and hopefully making making offers as well I know Stuart you've got some properties on the market at the moment have you seen that shift at all yeah so as regular listeners will know I have a property for sale in Cen which greater London and that's been on the market since September and it's not going to budge and it always reminds me that we can look at these figures at what I consider more of a macro level you know a much bigger level and talk about fluctuations but in in the property I've got for example there's a lot of M micro things that are going on as well there's a lot of activity happening in this very specific area that the Flat's in there's lots of other flats that have gone up recently the flat itself is suffering a with issues which are which are not for this podcast so we might have viewings but people might not be interested just because we need to sort some stuff out in flat as well as a few things going on so so that flat uh has um really not had any movement whatsoever and we'll be taking off the market shortly um for for a number of reasons but I have a property in the southwest which we put on the market um early this year it was one of my kind of things to do as soon as soon as we got got into the 2024 and within two weeks we'd had an offer and within two weeks we we'd accepted the offer and it was very very close to asking price now it's still going through at the moment so in typical um fashion I'm not going to jinx it by talking about any specifics at this stage because as we know in property there's a long way to go but what that showed me was we I think we priced it well I think we had a good Agent uh priced it very well we walked through how we constructed the price it matched my estimation of what I thought it would be in fact I think it's slightly higher than where I thought it was so again tells H track hom track suggest a 1.7% fall year on- year in that area do you think that that's reflected no not not in uh not in my property because again we've had that property for around about nine years and you know that's that's grown in value I would say it's grown in value by about 25% so um you know roughly speaking it's annualized at about 3% a year um you know if we we take if we don't take you know inflation into account which we're not because we're not an economics podcast and we don't do that we talk about we like we like inflation it's well no we don't like inflation my apologies but but I I think it's interesting to talk about inflation but it's just so complicated so yeah we're not bringing it into today's discussion it's certainly not for my brain today but the other thing wanted to to mention because we've talked about the fact that you know nationally is minus 0.5 and therefore in our minds negligible let so at the regional level let's just go quickly so Scotland 2.2% increase Northern irelands let's not forget them 4.3% increase and that's the biggest increase we've seen and again anecdotally I know a couple of people out there investing there talked about it's quite a frothy Market has been but then we come down to the Northeast 0.6% increased Northwest 0.7% increased and then Yorkshire and Humber 0.3 so as you said at the beginning as the further we come down south the more it drops and then actually West Midlands Wales both increased 0.3% so if we're saying that National nationally minus 0.5 decrease is uh is negligible then then surely we can say that those are probably about flat as well but then uh East Midlands minus 0.8 east of England minus 2.1% London as you said 0.8 8% drop Southeast minus 1.9 and Southwest minus 1.7 so just to clarify that for those that are listening so yeah I don't quite know what's going on with the east of England that they're bucking the the trend of being being the bigger numbers the further away you go from the middle yeah yeah but um but yeah so I've been very happy and also on the home track report it talks about the fact that there's a fifth more homes for sale than a year ago so that itself for me is interesting interesting because unsurprisingly very unsurprisingly people still need to sell homes and we've talked about this many times on the podcast before because there's all sorts of reasons and as a seller you don't you know unless you think because because again thinking about us as investors and and me selling you know I didn't look at the I wouldn't look at the southwest and say oh minus 1.7% I'll hold off selling my property for a bit because even if I thought that that was a direct calculation to make I would do my back of a f packet say well this is what the the agent and myself think the property is worth less 2% yeah I'm you know I would move on but I would never I'd never do that calculation we'd do the market value and if the market we've talked about a lot of this in a lot of detail before if the market value is something which I believe is acceptable then we're selling regardless of what is what we think is happening in the market and I think what we're saying is at the moment not a lot in terms of price it's all it's okay there's people selling properties there's people buying properties is um but we do need to be mindful y I mean looking at the the PMA data that we have you can also see sort of similar information or or Trends around the activity in the market so median days on the market at the moment so median time to sell a property in February 79 days so and that that that's back around where it was sort of for most of the end of of last year it went up a bit around early January but I think that's sort of lag from properties coming on at the end of last year and then them just sitting there during Christmas and and the festive season and and not happening not much happening to them so I mean it is spiked up into the the 90s something days of properties being on the market but yeah back back down to 79 at the moment and and also we can see price changes that are coming through in the market so in February only 15 % of properties on the market actually saw a price reduction versus I know let's let's pick uh October last year and that wasn't actually the peak but it was sort of a higher point and in October there were 22% of properties on the market seeing a price reduction so so yeah there I think there's more activity people are seeing more things moving and happening and things and it that that's reflected in the the statistics that we're seeing and in people not feeling that they need to reduce their prices quite so much I think it's a interesting to see and generally a positive thing I think something that might be a bit less positive in for some views is is the rental market at the moment and and we don't have any hom track data on this but we've got some some pmo data and we've got of own anecdotal experiences as well and in in the PMA data what we're seeing there is that the time to rent as in the days where rental property to be on the market is actually increasing a bit at the moment and that that would suggest that there is a a less frothy rental market this is data across the whole of England I haven't got a regional breakdown but that seems to contradict what I'm seeing personally in the the property that I've recently rented I I put it on the market I had over 50 inquiries in approximately a week a little bit over a week and I then arranged about 10 viewings I think it's was just under nine maybe I think and only one of the people who came to view did not then put an offer in but one thing I did see that was different this year versus last year when I rented the same property is nobody decided to bid over the asking rent everybody said yes we we'd like to take the property we very interested it would be lovely and we'd like to to pay the the full asking rent whereas last year there were multiple people coming back saying yes we're really interested in the property we' really like to take it and we will offer you over the asking rent in order to secure it so so maybe there just a very very slight slowing in the rental market and I suggested this might be good because I think the rental market is probably too busy a bit too demanding at the moment it's it's causing problems for people who are trying to find homes rental homes so I I don't know what do you think on that Stuart are you are you seeing very high demand for your rooms at the moment and and do you think the rental market is in a healthy position at the minute in terms of my uh portfolio I would say that we are in a good position and we we're mostly occupied I think I think we' we've just got the standard um the standard cycle of people leaving rooms so uh I haven't noticed anything different we have also increased the prices in line with inflation and Market rates and so far that doesn't seem to have impacted it so again this is in the southwest so you know we haven't seen any changes any other levels I you know wouldn't know um you know in terms of we've had long-term talents and that's the thing in TR to let in in our properties we've got long-term talents that have been there you know more than a couple of years so it's not something we get involved in but whenever we've looked at market prices and you know we didn't like most people for a couple of years we just left it but whenever we've had to increase those prices they've accepted them without um you know without too much fuss and you know because we explained to them and we've looked at the market rates so I think um you know it comes back to without without skiing off in this direction but it comes back to you you know we know it's it's really about demand and Supply isn't it and I think if at the end of the day we we know that there is a requirement for housing and homes and if you've got the right sort of Supply uh that that will be taken but the market will always mostly tell you when you've when you've mispriced something yeah I think I I think that I think there is still really high demand for r I mean at least in this area in my experience for homes and rather than rooms and things I mean there obviously lots of variation out there in the market but but I think generally demand is still very high but I think we have just sort of reached a point where rents have gone up and up and up and people just can't afford higher rents anymore so I don't think they can start bidding up to try and win properties with with higher rents I think I think the market is is at its limit at least in this area do you do you feel that at all or do you think there is still affordability scope or space or whatever in in your your rental market well I I I think you just said it there at the end you know gu what we just said it's about demand and supply and and also if if if we're renting you know so we rent rooms between 400 to 750 I mean the maximum room rate would always be getting close to a one bed flat possibly two um but but definitely a one bed flat and you know there are some people that would prefer shared housing um however there will always be that point at which someone just says no we can't we you know we're not going to pay that and we'd have to readjust so so as I say it's um we have seen uh if we're providing the right products if we've got good quality rooms on Suites and the property is in good condition people will be happy to pay the premium rates but to a to a limit if we push it past they they'll just go off and go find a one bed flat or find a partner to go and get a one bed flat yeah I just speaking of room rates reminds me I saw saw some some HMO rooms and I mean they they were intended to be proper luxury rooms but they they're local to us in Red Hill and and they were over ,000 a month for a room in a shared house and that's just just struck me as crazy high and and you're right you you can find one-bedroom flats for that in this area so possibly even less than that if you hunt a bit so yeah it's it is possible that that um HMO room rates can can go really quite high and just coming back to the house price um index in terms of the city summary what I found really interesting so the city index takes the 20 cities and sorts them in terms of their Euro year onye increase or decrease so essentially at the top of the list we've got the top 20 and we've got Belfast at the top with a year on year increase of 4 a half% and an average property price of 169,00 all the way down to Southampton which is an average price of 255,000 which has decreased by minus 2 and a half% but what really interests me is that Portsmouth Bournemouth and Southampton are the bottom three and they're all on the south coast which is not far from where we are so South Coast what you know what is going on there although Bournemouth interestingly they their average price is 3 128,00 now this is where data can can can can play tricks with us because you know in terms of the I don't know the mix of property types in Bournemouth must be slightly different you know thinking retirement areas and you know that kind of stuff but Bournemouth average property price is 328,000 and a bit Southampton 255,000 and you know they're just down the road so 130 ,000 uh sorry about 80,000 difference if if you're if you're willing to drive down the road but you're still be on the coast yeah it is quite Stark isn't it between between those and we talk about different percentages going up or down in different markets and things but we it is also important to say that the the actual numbers of pounds we're dealing with varies a lot so for example you've got Bournemouth on the south coast 328,000 is an average property price there whereas abedine up on the North Coast you're looking at 136,000 so it's a huge difference in actual pounds so these percentage swings will also be much more in terms of pounds on the south than they will be in the north so yeah it's yes statistics and possibly some lies in there somewhere yeah um I'm sure there is many many many lies hopefully not from our mouths and as always just to wrap up this podcast just obviously this is Simon and myself talking through just our thoughts on these things as we go nothing we say should ever be constituted as Financial advice um we do give advice time to time but definitely not Financial speak to your relevant professional for that hope you've enjoyed the episode if you have do leave us a rating please and a review if you feel that way inclined other than that we'll see you in the next so