UK House Prices 2024 | An Economist's View

Summary

In this insightful podcast, Dr. John, an economist and chartered surveyor, shares his expertise on the property market, particularly in Scotland. He discusses the current trends, noting a steady housing market with modest price increases despite economic challenges. He also addresses the differences between urban and rural markets, the impact of rent controls, and the potential for a 'Help to Build' program to increase affordable housing. Dr. John offers practical advice for those considering moving, emphasizing the importance of research and professional guidance in navigating the market.

Takeaways

• 😀 The speaker expresses gratitude for the support received and emphasizes the value of the content provided by Move IQ in relation to property questions.
• 🎓 Dr. John, a guest on the podcast, has a background in economics and chartered surveying, with around 20 years of experience in the field, including working for Reties, a leading independent property company in Scotland.
• 🏘️ The housing market in Scotland has shown resilience, with steady house prices and modest growth despite economic challenges such as the cost of living crisis and rising interest rates.
• 📈 Market activity in Scotland has been accelerating, with an increase in transactions and listings, and mortgage lending showing an upward trend, suggesting a positive outlook for the housing market.
• 🌍 Dr. John notes that while Scotland has a different constitutional settlement, it generally follows similar economic trends as the rest of the UK, which is reflected in the housing market.
• 💰 The speaker discusses the potential impact of political events and global conflicts on the housing market, but suggests that barring significant shocks, the market can be cautiously optimistic.
• 🏢 There are differences in the housing market dynamics between urban and rural areas in Scotland, with city markets and their hinterlands experiencing more growth due to increased economic activity and desirability.
• 🚫 The lifting of rent controls in Scotland may have disrupted the market, leading to a larger markup between tenancies and potentially exacerbating rent increases in cities like Glasgow and Edinburgh.
• 🏗️ The speaker highlights the importance of addressing the housing supply issue, suggesting that government incentives for building affordable and starter homes could help balance the market.
• 💡 Dr. John suggests that mortgage innovation, such as longer-term mortgages and mortgage insurance systems similar to those in Canada, could help first-time buyers enter the housing market.
• 📉 The speaker advises against waiting for a house price crash, as the housing market has proven resilient and house prices generally trend upwards over time, especially considering the housing shortage in relation to population growth.

Q & A

What is the main focus of the Move IQ company mentioned in the transcript?

Move IQ focuses on providing valuable content related to property questions and supporting individuals with insights into the property market.

What is Dr. John's professional background, and how did he become involved in the field of property economics?

Dr. John is an economist and a charter surveyor. He fell into the field about 20 years ago after completing his undergraduate and PhD degrees in economics, working in academia, the public sector, and later in a private sector consultancy that was acquired by a large property company. He retrained to become a property economist and a charter surveyor.

How long has Dr. John been working at Reties, and what is his role there?

Dr. John has been working at Reties, a leading independent property company in Scotland, for about 12 years. He is part of the research and consultancy team, advising clients on market direction and business strategies.

What was Dr. John's view on the housing market in Scotland at the time of the podcast?

Dr. John observed that the market activity was accelerating, prices were steady, and economic conditions were turning more positive in Scotland.

How does the housing market in Scotland compare to other regions within the UK?

Scotland tends to follow similar economic trends as the UK, with the housing market moving in line with the general economy. Scotland sits at mid-table or just above in terms of various socio-economic indicators compared to English regions and other countries within the UK.

What were the main factors contributing to the stability of house prices in Scotland despite a difficult market?

Factors such as falling mortgage rates, improving economic sentiment, and the procyclical nature of the housing market contributed to the stability of house prices in Scotland.

What are some of the challenges facing the housing market, according to Dr. John?

Challenges include high inflation, rising mortgage costs, the need for larger deposits, and political uncertainties such as elections and international conflicts.

How does Dr. John perceive the impact of rent controls and their potential lifting on the Scottish housing market?

Dr. John believes that rent controls have disrupted the market, leading to a bigger markup between tenancies and possibly exacerbating rent increases in cities like Glasgow and Edinburgh.

What advice does Dr. John give to someone considering moving or buying property in the next 12 months?

Dr. John advises setting a sensible budget and criteria, seeking good advice from agents or mortgage brokers, shopping around for mortgage products, and not rushing into decisions.

What are Dr. John's thoughts on the potential for a house price crash, and should potential buyers be concerned about this?

Dr. John does not anticipate a house price crash in the near future and advises against letting fears of a crash prevent people from making informed decisions about buying property.

How does Dr. John view the future of home ownership, especially considering the challenges faced by first-time buyers?

Dr. John believes that while the desire for home ownership remains strong, societal trends may be moving towards a more European model where people choose to rent, especially if good quality rental options are available.