The UK’s housing market is incredibly diverse, so it is vital that brokers are able to gain a thorough understanding of regional trends. Each part of the country faces different challenges and demands, so Vida wanted to take the opportunity to share some insights into the South West market in particular.
Affordability will be an issue for some
According to a study conducted by Barclays, the South West is the second wealthiest part of the UK, behind London and the South East. With property hot spots scattered across Somerset, Cornwall, Devon and Wiltshire, this region boasts a median household wealth of £288,300. As such, property prices tend to be high, making the South West a difficult region for first time buyers to get onto the property ladder.
According to Halifax, house deposits grew fastest over the last year in the South West, the East and West Midlands, and East Anglia. As a result, first-time buyers in the South West typically have to save for at least 13 years to raise a deposit.
All is not lost, however. Clients who are looking for an affordable property in the South West may want to consider Swindon or Reading, which are becoming increasingly populated with new build developments.
Due to affordability constraints, people who wish to purchase property in the South West often tend to invest in buy-to-let in more affordable areas, such as Wales or the North of England, renting their residential property whilst building up their investment portfolio.
Housing in multiple occupation
We have seen a notable increase in demand for BTL properties in the South West in recent years, as this region is home to many large universities, including the University of Bath and the University of Exeter, which makes it a popular area for HMOs
Research has shown that a good proportion of home buyers in the South West purchase their properties with cash, rather than a mortgage. In many cases, that is because buyers moving into the area are downsizing from family homes elsewhere.
According to Countrywide, the South West had the highest proportion of cash buyers (37 per cent) in the first half of 2018, and London had the lowest (21 per cent). However, the average home purchased with cash in London cost £503,560, which was more than double the average spent in the South West (£249,220).
The South West is a popular destination for those looking to relocate. Some decide to make the move in search of a better quality of life for themselves and their families, thanks to a wealth of attractive qualities including good schools and universities. Others choose the South West to acquire a second home for weekend and holiday visits, or as a rental property. Either way, 2019 is likely to be another busy year for this market, for advisers and buyers alike.
Sarah Hartwell, key account manager, Vida Homeloans