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Why transaction levels and not house prices? Well just looking at Nottingham house prices as a bellwether has flaws. Many property market commentators and economists believe transaction numbers (the number of properties sold) give a more accurate and candid indicator of the health of the property market than just house values alone. The reason is twofold. First, most people when they sell also buy, so if property values have dropped by 10% or risen by 10% on the one you are selling, it would have done the same on the one you are buying - meaning to judge the health of a property market is very one dimensional. Secondly, the act of moving is very much a human thing. Property habitually conveys a robust emotional connection with homeowners - a connection that few would attribute to their other investments like their savings or stock market investments. Moving home could be described as a human enterprise, moving from one chapter of one’s life to another. When people move home, it shows they are moving forward in their lives and so this gives a great indicator of the health of the property market.

 

Looking at Nottingham’s figures on the graph, you can see an inverse relationship between unemployment and housing transaction levels.

 

Property transactions in Nottingham dropped by 56.45%, whilst unemployment in Nottingham rose by 54.79% during the 2007 to 2009 Global Financial Crash

Until recently, you can see there has clearly been a relationship between conditions in the Nottingham job market and the number of people who move home ... interesting don’t you think?


Year

Unemployment % Rate
in Nottingham

Number of Properties Sold in Nottingham

2004

7.8

6307

2005

9.1

4929

2006

8.7

5888

2007

8.4

5966

2008

10.9

3069

2009

12.9

2598

2010

13.5

2732

2011

13.4

2606

2012

13.8

2502

2013

12.0

3032

2014

9.5

3903

2015

8.0

4021

2016

7.6

3859

2017

7.7

4005

2018

7.2

3947

 

Now I am not saying unemployment is the only factor influencing the Nottingham property - but it must be said there is a link.

 

As a country (and indeed here in Nottingham) over the last 40 years, we have seen a shift in the outlook over the purpose of housing and the development of the religion of following house prices (and I appreciate the irony of me writing these articles on Nottingham - feeding that habit!) Yet, when did owning a home turn from buying a roof over your head to an out and out investment vehicle? I do wish people would stop fretting about their intrinsic value being associated with their Nottingham home. Now of course, I am not dismissing the current levels of Nottingham house prices - we just have to take into consideration other metrics alongside them when judging the health of the property market locally.

 

One final thought, looking on a broader scale in the UK, those towns and cities whose property markets bounced back after the Global Financial Crash had high levels of employment and low unemployment whilst places with high unemployment and relatively low employment have, on the other hand, typically under performed. 

So the next time you are considering a house move or buying a buy to let property in Nottingham ... don’t make your judgement on house price growth alone.

Thank you for reading my article! Kind Regards Angela Barbaro-Robins 

Data Source from

Unemployment stats – ONS and Property Sales – Land Registry

The Property Ombudsman Trading Standards MyDeposits Rightmove Zoopla Primelocation CMP Shortlist