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: The struggle to find housing as prices across the capital skyrocket; UK house prices expected to fall 4.5% next year; Home buyers far more price sensitive as mortgage rates continue to rise; Bank of England set to unveil biggest interest rate hike in 33 years; UK average rent hits £1,051 a month; Is Renting Property A Good Investment?; Which house-price index is the best?… Happy reading and… renting!
Buy-to-let has reduced housing stock over 25 years
The buy-to-let market has “significantly reduced housing stock” for the past 25 years.
There are over 2.5mn landlords in the UK and 10 per cent of purchased homes are now for investment purposes.
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UK house sales up a third as mortgage rates rises spur movers
Home sales in July were more than a third higher than in the same month last year, making it the most active month in 2022.
Residential deals hit 110,970 in July, some seven per cent higher than June of this year.
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UK house price growth holds steady – but warning of sharp fall ahead
There are signs that the housing market is losing some momentum, with surveyors reporting fewer new buyer inquiries in recent months and the number of mortgage approvals for house purchases falling below pre-pandemic levels…
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The struggle to find housing as prices across the capital skyrocket
London renters have told of their struggles to find a property with bidding wars, packed viewings, and constant rejections.
The past three months have seen an annual rise of rental prices across the capital of 15.8%.
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Rents and tenant demand rise – but supply is falling
The latest net balance for landlord instructions came in at -13%, with falling supply across the rental market an ongoing theme over much of the past five years.
Over the next 12 months, rents are anticipated to rise by close to 4% at the national level.
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UK’s property market sucks in £84bn of new mortgage lending
The property market remains strong despite the record high price of a house in the UK, with the outstanding value of all residential mortgage loans up 3.8% to £1.648bn.
“Things have changed in the housing market since Q2. It is still running red hot, but it is exhibiting the hallmarks of a slowdown…”
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London house prices could fall by 12%
UK house prices rose by 15.5% in the year to July, according to the latest figures from the Office for National Statistics (ONS). That might make you think the housing market is in rude health, but there is trouble around the corner as interest rates continue to rise.
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UK house prices expected to fall 4.5% next year
UK house prices are expected to fall by 4.5% on average next year, however, this is still unlikely to make property more affordable for young buyers, new data has predicted.
2023 is likely to be a challenging year for the UK housing sector, with peak annual contraction of 6.2% expected in the third quarter.
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Average two-year mortgage rate tops 4%
At the beginning of August, the average two-year fixed sat at 3.95 per cent interest. But at the end of last week, this figure climbed to 4.09 per cent.
This is the first time the rate has breached 4 per cent since February 2013.
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Home buyers far more price sensitive as mortgage rates continue to rise
Demand for property currently remains above the five-year average, but there are clear signs that the impact of higher mortgage rates will have an adverse affect on market activity in the second half of this year, especially for first-time buyers and property purchasers in southern England.
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London home buyers need £35k higher income for mortgage
First time buyers will need to earn £12,250 more to afford a home as mortgage rates are set to be hiked up further this year.
Meanwhile, hopeful buyers in London will need a massive £35,000 more income to take out a loan on the average property compared to a year ago.
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What Next For UK Mortgage Rates?
So what do climbing interest rates mean for mortgages? The two million homeowners on variable rate deals, such as base rate trackers, will see an almost immediate rise in their monthly repayments. As an example, a tracker rate rising from 3.5% to 4% will cost almost an extra £60 a month on a £200,000 loan.
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1,000 fewer mortgage deals to pick from as hundreds of offers are pulled in just one month
House hunters and other borrowers across borrowers have close to 1,000 fewer mortgage deals to choose from than they did a year ago, as more than 500 deals have simply vanished since last month.
The number of available fixed and variable rate home loans has shrunk to 3,890 – marking the lowest level since April 2021.
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Bank of England set to unveil biggest interest rate hike in 33 years
Another rise in UK interest rates today is inevitable. The only question is how far policymakers will go, as pressure grows on the Bank of England to increase interest rates significantly to help curb the highest inflation rate in decades and a government keen to cut taxes to boost the economy.
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Call for government action on gap between housing benefits and rent paid
Low-income tenants across England are facing a ‘housing black hole’ due to soaring rents and the freeze on housing benefit leaving a huge shortfall in genuinely affordable homes.
The research reveals that only 12% of rental properties listed in the last year were affordable to those in receipt of housing benefit.
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Why is the cost of renting in the capital spiralling out of control?
The latest data from Rightmove’s Rental Price Tracker, which asking prices for new listings, found the average London rent was now an eye-watering £2,257 per month, a record high for any UK city. The past three months have seen an annual rise in asking prices of 15.8 per cent.
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The rental market is booming and ‘shows no immediate signs of slowing down’
England’s rental market remained buoyant in August, although rental costs and void averages took a month off from their record breaking streak.
Voids were up across the country after July’s historic lows, and the cost of rent dipped slightly during the same period.
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Scotland to introduce rent freeze to help support struggling tenants
The move is in response to rising household costs, with people worried about how they will manage to pay for soaring energy bills.
ScotRail fares will also be frozen until at least March 2023, as part of measures set out in the Programme for Government…
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Could London follow Scotland’s lead and bring in rent controls?
Pressure is mounting on ministers to address housing affordability across the UK after an emergency rent freeze was announced in Scotland to help private tenants weather the cost-of-living crisis.
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UK average rent hits £1,051 a month
Demand for cheaper flats is surging as the average rent in the UK has increased by £115 per month since last year, to stand at £1,051.
Rent is now so high that it swallows up just over a third (34.4%) of the average income of a single earner.
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First Steps Up The Ladder: 6 Advantages Of Buying A Leasehold Property
If you’re considering getting your foot on the UK property ladder and are saving up for a deposit, one of the first important decisions you’ll have to make is whether to buy freehold or leasehold.
In recent years, leasehold ownership has had a bad rap and many of the vulnerabilities of the system came to public attention during the leasehold scandal of 2017.
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Is Renting Property A Good Investment?
Given the rising cost of living we are expected to face in the coming months, you may be wondering about ways to earn some extra money as a passive income to help get by. There are many ways of investing that can see you make massive returns such as the stock market or cryptocurrency.
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Right To Rent Check Guide For Landlords & Tenants
All landlords in England are required by law to conduct a ‘right to rent’ check before leasing their property to a prospective adult tenant. The purpose of this requirement is to prevent people without lawful immigration status from accessing the private rental sector.
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First-time buyers struggling to buy coastal homes as house prices outstrip pay
First-time buyers in the UK are struggling to purchase properties in coastal areas as strong house price growth has outpaced local salaries.
New analysis found that areas by the coast have seen the biggest decline in first-time buyer affordability during the coronavirus pandemic.
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All bills included’: Ticking timebomb for all-inclusive tenancies after numbers plummet 90 per cent since January
As energy bills soar for households across the UK, there are signs the cost of living crisis could spell the end for ‘all inclusive’ tenancies.
The number of tenancies advertised as having ‘bills included’ in July was 90 per cent lower than figures recorded in January of this year.
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Landlords urged to resolve succession planning – and avoid IHT bills
There is a ‘worrying lack of succession planning’ among older landlords, with half of those aged 45 or above lacking any long-term management plans, a survey reveals.
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Reading house prices: Average house prices rise by £1,000
The latest data from the government department reveals that in June 2022 average house prices in Reading reached £322,838.
This was up from £321,612 in May.
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What causes the most disputes between landlords and tenants?
In 2021-22 the three tenancy deposit schemes in England and Wales issued 31,276 adjudications representing an increase of 1,579 from the previous year.
In 2019-2020 the schemes dealt with 34,993 disputes.
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Number of landlords in the UK increases – claim
Despite the Government’s best efforts, the number of landlords within the British rental market has climbed by 2.4% since 2016/17, research reveals.
There are nearly 2.6 million landlords – a 2.4% increase over the last three years.
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Which house-price index is the best?
Britain is obsessed with house prices, and we have at least four house-price indices to choose from to measure the rate of increase in the value of our properties. But how do they differ, and which is the best?
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