The Importance of Property Black Spots
Simon Morris is an independent, London-based property specialist. He uses his industry expertise to advise UK property investment funds on how to maximise profit potential on their property portfolios
Simon’s experience has taught him the importance of knowing the market’s current black spots – where property prices are consistently falling. Only through becoming intimately equated with such black spots, can a UK property investment fund hone its investment plan to raise its bottom line.
The Top 20 UK Property Black Spots
That is why it is so important that a new study has revealed the UK’s biggest property black spots. Compiled by Home.co.uk, it revealed 20 such black spots, including several in London, as well as some in seaside towns, and in the North East of England.
Belgravia was found to be London’s biggest black spot, with house prices falling 7.6% annually. Soho followed (6.8%), with Westminster bringing up the rear at -5.2%. Real percentage yields for the three boroughs in September measured falls of 4.4%, -3.5% and -1.8% respectively.
Poole, Dorset, was found to be seaside towns’ biggest black spot, with house prices falling 7.1% over the last year, and rental yields measuring -2.5%. Meanwhile in the North-East of England, Hartlepool was found to be the biggest black spot. Annual property values fell by 7.5%, and rental yield stood at -1.8% for September.
Different Circumstances Lead to the Same Conclusion
Director of Home.co.uk, Doug Shepard, commented on the findings. Shepard said: “Prices soared in central London post financial crisis as foreign investors sought safe haven investments. Such was the demand for this type of premium property that prices overheated, reaching a peak last year, and are now in the throes of the painful process of market correction.
“By contrast, Hartlepool home prices fell hard following the financial crisis and price recovery has been elusive. In fact, price erosion continues in many such locations where supply seemingly continues to outweigh demand.”
Areas to be Avoided
Either way, these conditions have resulted in these areas becoming major UK property black spots. In Simon Morris’ experience, this illustrates that if you want to ensure profitability for your property portfolio, this data shows that these areas to be avoided.