Latest: property market report
While it was the hottest June since records began, the property market started its summer cool down early. Rightmove cited the new 5% interest rate as a reason for earlier-than-usual changes. Its June headline revealed the first monthly drop in asking prices in 2023.
Sellers reduced their asking price by £82 in June, leaving the UK’s average asking price at £372,812. The portal says the dip will set the scene for the rest of the year. It expects asking prices to fall during the rest of 2023, resulting in a -2% annual drop by the end of 2023.
Demand among buyers remains
For sellers, the asking price reduction is minimal and is coupled with good news. Rightmove’s analysis found buyer demand in June was 6% higher than in the same period of 2019. The average time it takes to find a buyer remains lower than its January 2023 peak too – down from 62 days to 55.
House prices hold firm
Stability was also the theme of Nationwide’s June House Price Index. It found house prices increased just +0.1% between May and June, levelling out the -0.1% dip seen between April and May. Interestingly, it said the higher interest rate had not yet affected the number of mortgage applications.
The UK’s rental market continues to post record values. HomeLet’s June Rental Index showed rents had risen an average of +1.3% in the month, taking the average annual rent increase to 10.4% . Today, the average cost to rent a property is £1,229 per month.
HomeLet’s June Index also illustrated how tenants are now spending 31.9% of their income on rent. It’s a sentiment echoed by the latest report from Zoopla. It found rental costs, as a proportion of earnings, had reached the highest for a decade, while rents had grown faster than average earnings over the last 21 months.
For landlords monitoring the market, tenant demand remains strong. The summer season is when we traditionally see a peak in interest, with families and students looking for accommodation ahead of a new academic year. This year looks set to bring a bumper crop of enquiries.
We take our cue from Propertymark’s latest report. It reveals the number of prospective renters registered per member’s branch in May 2023 was higher than the same month in 2022. It also found today’s number of available properties to rent was 12% lower than at the same time last year.
Landlords tempted to purchase more properties
While there has been news of landlords exiting the buy-to-let market, sustained demand is prompting a rethink. A new survey by Landbay found confidence among some landlords is rising. In fact, 41% of landlords questioned said they are planning to buy more properties over the next 12 months.
While rental demand was the top reason for expanding property investment portfolios, some landlords were encouraged by the thought of potentially lower house prices. As well as landlords with portfolios of 11-20 rental properties eyeing up expansion, almost half of landlords with two or three buy-to-lets were also considering adding more to their portfolio.
Bill’s progress looks to have stalled
June’s passing also marked another month without the enactment of the Renters’ Reform Bill. A second, scheduled reading never materialised, despite rumours. Our visit to the official parliamentary web page for the Bill revealed a date for the second reading is ‘to be announced’.
Tenants are especially keen for the Bill to progress with speed, especially in light of new BBC research. The broadcaster found thousands of adverts that prohibit tenants with children and pets from applying for particular properties. While not illegal at present, this is an aspect that would be addressed under the Renters’ Reform Bill.
If you would like to know more about your local property market, please get in touch.
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