In 2004 (20 years ago!), friends Tim Morgan and Robert Medd founded E.R.E Property Group – a sales and investment advisory company focused on residential investment opportunities in high-growth areas.
The property landscape has evolved a lot over the past 20 years E.R.E Property have been established, let’s take a look…
Rising House Prices: A Two-Decade Surge
One of the most notable changes in the UK property market is the consistent rise in property prices. In 2004 the average property price was £159,243, however this continued to rise to £190,000 until the housing market crash in 2009 causing the average price to drop to £154,500. However, by the end of 2009 the market started to recover, and prices consistently increased with the current UK average price being £287,924 as of June 2024.
Mortgage Rates: A Rollercoaster Ride
Mortgage rates have seen some dramatic fluctuations over the past 20 years. When E.R.E Property formed, the base rate sat at 4.75%, but rose to 5.75% by 2007. However, with the aftermath of the 2008 global financial crisis, the base rate fell to its lowest level in 300 years to 0.50% in March 2009 in an effort to get people spending and rebuild our economy. This was dropped again in 2016 to 0.25% but later rose to 0.75% in 2018.
In the aftermath of the global COVID19 pandemic, the Bank of England dropped base rate to an historic low of 0.10%, however as restrictions started to lift, the country faced persistent inflation. Consequently, the Bank of England started to raise the base rate again incrementally until it reached a peak of 5.5% in 2023. Today the base rate stands at 5%.
UK Population Growth: Increasing Demand
The UK population has steadily increased over the past 20 years which has in turn created higher demand for property. In 2004 the UK population was 59.99million, whereas today it is 69.14million. This growth has been driven by a combination of natural increases, and aging population and immigration, particularly from the EU and Commonwealth countries.
Rise of technology
A major change in the way property investment agencies work has revolved around the use of technology and the internet.
When E.R.E Property first started, getting in touch with those interested in investing property happened via an ad in the papers!
In 2000, property portal Rightmove was formed allowing buyers to see all the properties for sale by all agents in one place. Rival property portal Zoopla was founded in 2007, with both companies striving to be innovative and provide the public with as much information as possible at their fingertips, this enabled people to do more research and due diligence before committing to a purchase than ever before, allowing for more transparency between agents and their clients.
In 2003, social media platform LinkedIn was formed primarily as a way for business professionals to connect with one another and share job opportunities. The platform has grown significantly over the past 20 years and now has over 1 billion users. LinkedIn is now used to share insights, news, promote brands and individuals and even attract new clients.
In 2004, social media platform Facebook (originally called Thefacebook) was born and by 2006 was available to the general public, allowing people across the world to connect with their friends. In 2007 Facebook allowed business pages, meaning that companies could tell people about themselves and attract potential customers. Since then, we have seen the rise of several social media platforms such as X (previously called Twitter) in 2006, Instagram in 2010 and even TikTok in 2016. The rise of social media has dramatically changed how the industry market their products and services.
The way customers communicate is also a major change in relation to the industry, with applications such as WhatsApp, Skype and Microsoft teams allowing people to connect with each other from around the world for free by using internet connectivity. This has made it easier for investors who aren’t close to either one of our three offices worldwide, to talk to and have meetings with any of our Investment Consultants.
Notable Events Impacting the Property Market
2008 Global Financial Crisis
The 2008 financial crisis was a defining moment for the UK property market. House prices fell by around 15% between 2008 and 2009, and the number of property transactions plummeted. Many homeowners found themselves in negative equity, and mortgage lending tightened significantly. This led to a more cautious lending and stricter regulations and affordability checks. However, overseas investors took advantage of the opportunity and foreign money started flooding into prime property in the capital, with a mixture of investors and private buyers attracted by low property prices. This caused house prices in the capital to soar, with property ownership becoming even further out of reach for most citizens, contributing to the increased demand in rental properties.
2013 Introduction of the Help to Buy schemes
The help to buy scheme was aimed to assist first-time buyers by providing government-backed loans and shared ownership options. The scheme significantly boosted demand for new-build homes, contributing to price increases in this sector. While Help to Buy has enabled many to get on the property ladder, it has also been criticised for inflating house prices and primarily benefiting developers. The scheme was eventually phased out in 2023.
2014 Stamp Duty Reforms
In December 2014, the UK government restructured the Stamp Duty Land Tax (SDLT) system, introducing a progressive tax structure. This reform lowered stamp duty costs for many buyers but increased it for higher-value properties. In April 2016, an additional 3% stamp duty surcharge was introduced on the purchase of second homes and buy-to-let properties. This change significantly increased the cost of investment properties, leading to a rush of purchases before the deadline and a subsequent slowdown in buy-to-let investments. In 2021, a new 2% surcharge was introduced for buyers who are non-UK residents.
2016 Brexit
On 23rd June 2016 the UK voted to leave the European Union, and the UK officially withdrew in January 2020. In the heat of a divisive campaign, the government said house prices could fall by 18%, half a million jobs may be lost, and foreign buyers would turn away from the UK if the country voted to leave. Immediately following the referendum, house prices slowed, and transaction volumes dropped, particularly in London and other regions heavily reliant on foreign investment. However the long-term impact has led to investors looking at cities outside of London instead and in fact, UK house prices grew 32% between July 2016 and May 2022.
2007 Changes to anti-money laundering regulations
All agencies who sold land or property had to register with HMRC. Agents are required to obtain all clients photographic ID and proof of address to establish and check the client’s identity, along with running enhanced anti-money laundering checks.
2017 Changes to Mortgage Interest Relief
Between 2017 and 2020, the UK government phased out the ability for landlords to deduct mortgage interest from their rental income before calculating their tax liability. Instead, they introduced a 20% tax credit on mortgage interest payments. This change significantly impacted the profitability of buy-to-let investments, particularly for higher-rate taxpayers. As a result, some landlords sold their properties or raised rents to cover the increased tax burden, while others shifted their focus to cash purchases or limited company structures to mitigate the impact.
2017 Grenfell
The devastating Grenfell Tower fire in 2017 brought to light significant safety issues related to cladding on high-rise buildings across the UK. In response, the government introduced stricter regulations. All new builds now have to follow these rulesand exiting buildings are to undergo renovations to make them safe again.
2018 Introduction of MEES (minimum energy efficiency standards)
The Minimum Energy Efficiency Standards (MEES) introduced in 2018 require rental properties to have a minimum Energy Performance Certificate (EPC) rating of E or higher. This regulation has forced landlords to invest in energy efficiency improvements or face fines and restrictions on letting non-compliant properties. MEES regulations have increased the cost of maintaining rental properties, particularly older ones. However, they have also raised awareness of sustainability in the property market, with energy efficiency becoming a more important factor for both buyers and renters.
2020 Covid19 Pandemic
The onset of the COVID-19 pandemic in early 2020 led to a temporary halt in the property market, with transactions and house viewings paused during lockdowns. There was initial concern that house prices would fall sharply due to economic uncertainty, however the UK market proved resilient, partly due to government support and low interest rates. The pandemic has shifted buyer preferences, with a greater emphasis on properties that accommodate remote working and outdoor space.
2022 Russia invades Ukraine
The Russian invasion of Ukraine, which began in February 2022, has had several indirect yet significant impacts on the UK property market. One of the most immediate effects of the invasion has been the sharp increase in global energy prices. Russia is a major exporter of oil and gas, and the conflict disrupted supplies, leading to higher energy costs worldwide, including in the UK. This spike in energy prices contributed to a surge in inflation, reaching levels we have not seen in decades, thus the Bank of England responded by raising interest rates multiple times throughout 2022 and 2023. Higher interest rates have made mortgages more expensive, leading to reduced affordability for potential homebuyers and cooling the property market. The conflict highlighted the importance of energy security, leading to a surge in interest in energy-efficient homes. Buyers are increasingly prioritizing properties with features like good insulation, double glazing, and renewable energy sources, such as solar panels, to mitigate rising energy costs.
How business is looking now
E.R.E Property have continued to sell off-plan developments considering all the points above before taking on a scheme and have a number of opportunities across the UK. Over the last couple of years we have also become a main selling agent for Social Impact Housing properties for clients looking for a completely hands-off investment.
Our head office is still based in Leeds, headed up by our Managing Director Helen Mercer-Jones, and we also have offices in Hong Kong and Dubai.
