Despite the uncertainties of Brexit, some areas in the UK and Europe and seeing positive trends in the property market. One such place is Bristol, where house prices are rising faster than even London, at a rate of 5.6 percent in 2016.1 This growth is also faster than most places in the rest of Europe – third only behind Budapest and Oslo.2 According to figures published by Knight Frank, the areas that have seen the biggest growth are Redland (9.9 percent) and Harbourside (9.1 percent).1 The majority of housing in Bristol is either terraced (37 percent) or flats (36 percent), with very few detached homes (four percent).1
So, why has Bristol suddenly become a hot property market?
There are a number of reasons this is happening now but first, it’s worth pointing out that Bristol’s overtaking of London, in terms of an increase in average housing prices, is mainly down to the capital itself. London has perhaps seen a slightly more negative impact from Brexit than anywhere else, as international investors are a little more uncertain.2 This isn’t necessarily a huge factor, but people are kind of waiting for the dust to settle a little.
The other thing is there was a change in stamp duty tax last April, which affects higher priced properties.3 London obviously remains the most expensive city in the UK. But growth has slowed down a little, paving the way for places like Bristol to take the lead. That’s not to downplay the positive aspects impacting Bristol. For one thing, interest rates on mortgages are currently quite low, creating opportunities for first-time-buyers to get onto the housing ladder.
New buyer enquiries increased by 30 percent in 2016.1 Then there is the fact that there have always been benefits to living in Bristol, especially for families. Schools, in particular, are generally considered to be of good quality. In addition, the increase in housing prices is also down to a negative aspect of Bristol – there is not enough supply to meet demand.1
Bristol Office Market
It’s not just the housing market seeing something of a boom. A number of “bumper deals” involving prime office space have given a boost to the office property market.4 One such deal was the purchase of an office building by AEW Europe, a real estate asset manager, for approximately €54m.5 In the city centre of Bristol, 782,938 sq. feet of office space was occupied in 2016, 29 percent higher than the five year average leading up to that year.4
The AEW Europe office space, which was renovated in 2014, accounts for around 16,146 sq. feet of that.5
Over £324 million was invested in office space through 2016, 57 percent higher than the annual average for Bristol of £207 million.4 A lot of this (£130 million, about 40 percent) came from property businesses.
Bristol is clearly seeing very positive growth in both its housing and office space markets – and doesn’t appear to have seen any negative consequences as a result of Brexit.
With a new General Election due to take place in June – there could be more significant changes to come. We’ll keep you in the loop here at Cogress.