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: Demand for new homes down 50% as property market continues to cool; Growing concern as ‘storm clouds loom over the UK housing market’; Brits untroubled by rising mortgage rates as property transactions rise; Rent freeze to be extended; First-time buyer numbers fall 9% in 2022… Happy reading and… renting!
House prices to fall but soft landing predicted, underpinned by low housing supply
This outlook will depend on how the broader economy performs with a soft landing likely, underpinned by low housing supply, high levels of housing equity and a high proportion of fixed-rate mortgages.
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Demand for new homes down 50% as property market continues to cool
Zoopla’s house price index showed prices increased 7.2%, or £17,500, year-on-year, but quarterly growth has slowed rapidly and is set to move negative in the first quarter of 2023. It expects house price index to register quarterly price falls over the first half of 2023.
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What Will Happen to the UK Housing Market in 2023?
A new year is often seen as a fresh start, and for many, it is a chance to try new things and begin new adventures. For those looking to invest their money, property investment is often a strategy they consider at the start of the new year.
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The best city for buy to let investment revealed
According to Aldermore, the best location for BTL investors is Manchester which appears to be weathering the economic storm well from a landlord perspective.
The tracker puts London in second place, and Bristol is third.
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House Prices – Latest News
Average house prices grew by 10.3% in the year to November 2022, down from October’s figure of 12.4%, according to data from the Office for National Statistics and the Land Registry.
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A housing market correction was inevitable
The boom in sales which began during the first lockdown of the pandemic continued for most of the year and it is only in the Autumn when average prices peaked only now appear to be starting to decline.
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UK house prices fall more than £4,100 in one month as living costs tighten
UK house prices fell for the fourth consecutive month, with property values decreasing by 1.5% in December, following a 2.4% drop in November, a 0.4% decrease in October and a 0.1% dip in September.
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Growing concern as ‘storm clouds loom over the UK housing market’
It has seen a “marked slowdown” in the UK housing market over the past six months on the back of political and economic uncertainty” and rising mortgage rates, which made homes less affordable.
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House prices on the rise again despite mortgage hikes
The average price of property coming to the market for sale has jumped £3,300 to £362,438 this January after two months of falls.
The 0.9% increase in asking prices is the biggest increase at this time of year since 2020.
However, average asking prices are still £8,720 lower than their peak in October.
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Rental market starts 2023 strongly
The demand for rental property is still outpacing supply and rent growth is still rising – so the sector starts 2023 very much like it ended 2022, one property expert says.
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Brits untroubled by rising mortgage rates as property transactions rise
Monthly property transactions have increased across the UK and returned to pre-pandemic levels despite the ongoing cost of living crisis.
Monthly property transactions in the UK above £40,000 have increased consecutively over the past nine months.
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How will the top end of the housing market fare amid rising interest rates?
The top end of the UK’s property market is seeing a growing gap between heavily mortgaged and equity-rich homeowners as interest rates rise.
The most mortgage-dependent markets, including swathes of south west London, suburban markets and the capital’s commuter belt, have started to see small price falls.
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Halifax relaunches tracker mortgage rates after four years
Halifax has relaunched mortgage tracker rates for the first time in four years amid a wider market shift from fixed to variable interest rates.
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Home repossessions on the decline despite rising mortgage costs
The lastest market analysis from a property purchasing specialist reveals that since the Bank of England started raising interest rates at the end of 2021, the number of homes being repossessed by money lenders has significantly decreased, bucking the expected trend that more and more people would lose their homes as mortgage payments go up.
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1.4m homeowners face huge hike in mortgage costs this year
More than 1.4 million homeowners face a steep rise in borrowing costs when they renew their fixed-rate mortgages this year.
According to the Office of National Statistics (ONS) 57 per cent of mortgages in the UK coming up for renewal in 2023 were fixed at interest rates below two per cent.
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Why UK banks are not going to cause another financial crisis
Strict affordability rules implemented after the 2008 banking crash have strengthened lenders’ loan books, meaning they are well insulated from a potential rise in defaults caused by last year’s upward march in mortgage rates.
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House price crash would be ‘welcome news’ for generation rent
Looking ahead to the new year for the mortgage market, some advisers have argued a house price crash will be a good thing, while many are in agreement that greater support is needed for first-time buyers.
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Affordability will hit tenant demand and rent rises in 2023
According to Zoopla, rents rose by 12.1% in 2022 but rent now accounts for 35% of a renter’s income.
In total, the property platform says that tenants spent £5.4 billion on paying rent this year.
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Two-thirds of landlords say 10% rent rises are likely in 2023
49% of buy-to-let owners feel that “it’s harder being a landlord now compared to a year ago”, faced with inflation at 10.7%, interest rates at 3.5% and a volatile housing market.
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Tenants should brace themselves for soaring rents, letting agents warn
The poll of more than 1,100 letting agents, carried out by the UK Association of Letting Agents (UKALA), reveals that 79% of member letting agents see rents rising in 2023, with over half – 58% – expecting to see growth of up to 10% and 21% by over 10%.
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London ‘at heart of housing crisis’ as number of private renters passes 1 million
The number of London households privately renting has passed one million after rising by 25 per cent in a decade, new census data shows.
Centre for London analysis of the latest Office for National Statistics figures found that 1,025,533 households in the capital were leasing from a private landlord in 2021.
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Rent freeze to be extended
Tenants’ rights minister Patrick Harvie delivered a statement in Holyrood on Thursday confirming he will recommend that MSPs approve an extension to the freeze on private rent rises.
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The London postcodes where rents have risen by more than a third in the past year
The cost of renting a room has soared by more than a third in some parts of London in the last year, data has revealed.
Figures showed that tenants in the W7 and SW20 postcodes were paying 34 per cent more in the fourth quarter of 2022 than they were at the end of 2021.
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The bank of mum and dad mortgages
With mortgage rates increasing following the mini-budget and 2022’s house-price-to-earnings ratio now at seven, parents are looking at new and innovative ways they can utilise their own income and savings to help their kids onto the property ladder.
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Is there a future for Buy-to-let?
Napoleon labelled the British ‘a nation of shopkeepers’, but two centuries later it seems we’ve become a nation of landlords. Today, there are an estimated 2.65 million private landlords in the UK. Collectively, those landlords own more than £1 trillion in property assets.
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Government risks ‘causing chaos’ with plans to reform rental market
The government’s plans to reform the rental market threaten to cause widespread uncertainty across the sector, particularly when it comes to student housing, with a reduced volume of units likely to be available at start of each academic year.
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‘Bank of mum and dad’ to return in fight against mortgage and rent double whammy
The “bank of mum and dad” may be called upon for more help in the new year, as aspiring first-time buyers deal with a double whammy of higher mortgage rates and surging rental costs while they try to save.
But for those buyers who are able to make the jump onto the property ladder next year, there may also be some opportunities.
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First-time buyer numbers fall 9% in 2022
Across the UK, the number of people taking their first step onto the property ladder was estimated to have fallen to 370,287 across 2022, edging down from a 20-year high of 405,320 in 2021.
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Why not pay Housing Benefit directly to Landlords?
Housing Benefit is paid to tenants to cover their housing costs. There would be numerous benefits to landlords, tenants, Gov.uk and local authorities if it were paid directly.
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Lenders have ‘obligation’ to support struggling borrowers
Mortgage debt and home repossessions are much lower than during previous financial crises, the Bank of England’s governor said as he emphasised lenders’ “obligation” to support borrowers.
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New scheme to support landlords and tenants in Pembrokeshire
LOCAL private sector landlords are invited to the launch of a new scheme enabling them to lease their property to Pembrokeshire County Council for between five and 20 years, in return for a guaranteed monthly rental income and full property management service.
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