Like every month, Rentila offers you an overview of the main real estate news of interest to landlords and tenants. This month, we focus on: UK house prices to fall as mortgage rate hike hits ‘buying power’; Banks to tighten mortgage lending in 2023 amid rising interest rates; More than a quarter of landlords want to sell; London rents reach record high of £571 per week; Prospective first-time buyers advised to wait until 2024; Seven in 10 landlords have properties with an EPC rating of D or below… Happy reading and… renting!
Housing transactions total 112,370 in September
This is a 32% fall on an annual basis and no change compared to the number seen in August 2022.
The data also counts 9,940 non-residential transactions for the same period, which is 7% higher annually and 5% more when compared monthly.
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House prices in cities climbed 9.2% since January with Sheffield, Southampton and Leeds named as top risers
House prices in UK cities have risen 9.2 per cent since the start of the year, as demand for urban property increases following the end of the Covid-19 pandemic.
In contrast houses in suburban areas surrounding cities only rose by 7.9 per cent over the same period, suggesting that the ‘race for space’ outside of cities is over.
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Edinburgh house prices increased more than Scotland average in August, figures reveal
The rise contributes to the longer-term trend, which has seen property prices in the area grow by 8.9 per cent over the last year. The average Edinburgh house price in August was £337,506, Land Registry figures show – a 1.4 per cent increase on July.
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UK house prices to fall as mortgage rate hike hits ‘buying power’
The recent spike in mortgage rates represents the largest interest rate shock for new buyers since the late 1980s and despite signs that mortgage rates will fall back, they will not return to the ultra-low levels of recent years.
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Landlords pay up to 7.7% more for BTLs in high demand areas
Landlords looking to reduce void periods by investing in a buy-to-let within an area of high rental demand will pay an average of 6.2% more for the pleasure, research reveals.
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Property industry reacts to another drop in UK house prices
Residential property prices recorded the biggest monthly fall in October since early 2021.
The average property value dropped by 0.4%, marking the third month-on-month drop seen in the past four months.
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UK house prices set to fall ‘back to the level they were at in summer 2021’
Across the UK, a net balance of 2% of property professionals reported house prices falling rather than rising, as increasing mortgage costs fuel greater caution among buyers, according to the latest RICS Residential Survey for October 2022.
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More than a quarter of landlords want to sell
Just over a quarter of landlords plan to make no changes to their investment in the current climate and only 3% intend to buy more properties.
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Estate agents report a fall in house prices across the UK
Estate agents reported a downturn in house prices across the country in October, according to the latest RICS survey, ending a run of 28 months when house prices were rising.
Respondents based in Northern Ireland and Scotland continued to report an upward trend in house prices, even if the pace of growth was slower than earlier in the year.
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Landlords plan to offload properties amidst soaring mortgage costs
The growing number of landlords exiting the private rented sector (PRS), owed largely to an increase in regulation and taxes, is a major cause for concern, and an issue that the government can no longer afford to ignore, as buy-to-let investors see their profit margins squeezed.
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Banks to tighten mortgage lending in 2023 amid rising interest rates
Banks are expected to tighten mortgage lending for UK property as they battle higher interest rates, a riskier economic outlook, and volatility in the markets.
The forecast for mortgage lending in Britain is set to grow 4% this year.
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Bank of England expected to hike interest rates to 33-year high
The Bank of England is poised to unveil the biggest hike in interest rates for 33 years next week as the central bank continues its efforts to tame inflation.
The key Monetary Policy Committee (MPC) meeting comes amid warnings that spending cuts and tax hikes under new Prime MinisterRishi Sunak could lead to a deeper and more enduring recession.
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Zoopla warns high mortgage rates could shave 5% off UK house prices in 2023
“The spike in mortgage rates represents the largest interest rate shock for new buyers since the late 1980s and despite signs that mortgage rates will fall back, they will not return to the ultra-low levels of recent years…”
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Homeowner arrears numbers stable but possessions rise
In total, there were 74,440 homeowner mortgages in arrears of 2.5% or more at last count.
And of these, 28,910 were in ‘significant’ arrears – defined as being 10% or more of the outstanding balance. UK Finance reports this figure as being unchanged on the quarter.
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Where does the housing market stand with a 3% base rate?
While rates have risen, housing market sentiment has fallen. A record half (52 per cent) of adults across Britain disagreed it was a good time to buy a property, according to a September survey.
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Rents at record high mean ‘extreme’ competition for properties
Everywhere in Britain had an increase in the number of rental properties available except for London where there was a 24% decline in the number of rental properties available.
Meanwhile, demand for rental properties was up 20% across Britain…
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Landlords forced to raise rents to meet mortgage affordability criteria
Nine in ten respondents to a new survey of landlords 600 have either already increased rents, or intend to increase rents, in part to meet mortgage affordability criteria, or risk being trapped on high rates, due to the Bank of England interest rate rise.
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Rent freeze becomes law in Scotland
Emergency legislation protecting tenants from rent increases and evictions during the cost-of-living crisis has become law in Scotland.
It is understood to be the first Holyrood legislation to be given royal assent by the King.
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Falling house prices will bring renters limited comfort
House prices are going to fall in an overdue correction across a market super-charged by many years of miniscule interest rates, and the more recent rush towards larger properties in the wake of Covid lockdown restrictions.
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Why a rent freeze in England just took a giant step forwards
Leaving aside that there is a perfect storm brewing, is there really a private landlord anywhere in England who doesn’t believe that a rent freeze is on its way? And with it, a moratorium on evictions too.
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Tenants warned that ‘it can only be a matter of time’ before rents soar
New market analysis suggests that the average rent bill in this country could reach as much as £2,270 per calendar month if prices rise in line with the hikes already being seen across other living costs.
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London rents reach record high of £571 per week
London residential rents set a new average weekly record in October, with tenants in the capital paying £571 a week.
This exceeded the previous high of £553 per week seen in September 2022, according to property agents.
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Prospective first-time buyers advised to wait until 2024
With first-time buyer demand 21% lower in the last two weeks compared with 2021, a research also found that 26% of landlords are looking to sell their buy-to-let property due to soaring costs. This sell-off is set to make rental prices even more expensive.
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Best areas for buy-to-let in the UK
Currently, two- and five-year fixed rates sit at over 6%, the highest since the 2008 financial crisis. On top of that, house price growth is beginning to show signs of a slowdown following the huge boom we saw over the last couple of years.
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With mortgage rates high and house prices falling, should you delay your plans or is it a good time to haggle?
Two years of double digit house price rises and 40-year high inflation will have left many thinking things couldn’t get much worse.
But on top of that, first-time buyers are now facing some of the highest mortgage rates recorded since the financial crisis, combined with an expectation that house prices will fall in the near future.
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Lack of clarity on policy leaves BTL landlords ‘stuck in limbo’
The government’s white paper ‘A Fairer Rented Private Sector’ aims to reform the rules around the rental sector in the UK and improve the balance between tenants’ and landlords’ rights and responsibilities.
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Government urged to give BTL landlords stamp duty ‘exemption’ to boost rental supply
Rents are rising sharply across much of the country as demand from tenants continues to heavily outweigh supply, and the government is being encouraged to take action now to reverse the trend by supporting property investors, in light of rising mortgage costs.
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8 stamp duty-free homes for first-time buyers
the stamp duty cuts announced in the recent mini-budget go some way towards easing their passage on to the property ladder, as the threshold before tax that kicks in at 5% has been lifted from £300,000 to £425,000 for new buyers (and from £125,000 to £250,000 for home movers)…
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Seven in 10 landlords have properties with an EPC rating of D or below
While landlords are currently able to let homes which have an EPC rating of D and above, standards are widely expected to become tougher.
The government has previously set out an ‘aspiration’ for a minimum C rating in England and Wales by April 2025.
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Landlord repossessions hit all-time high in Q3: Ministry of Justice
The report says landlord possession claims in the third quarter, compared to a year ago, lifted 106% to 21,012, orders for possessions jumped 174% to 15,352, warrants are up 87% to 8,505 and repossessions rose 10% to 5,403.
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Private landlords need information and education to improve standards for renters
A study looked at landlords’ behaviours and practices which affect tenants’ ability to make a home in the sector. These include making sure the property is in a good state of repair, selecting tenants, and complying with relevant laws and regulation.
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