This week further demonstrated how the absence of cheap money is unsettling people and prices. The rental seesaw increasing whilst sales volumes and prices plummet. Sellers and buyers’ hopes still have a way to go before becoming aligned but movement is afoot. Welcome to another UK Property news recap, covering the weeks news on everything property related. 

 

Rightmove Asking Prices

Realisation begins to dawn on sellers that this isn’t the market to be overly greedy, however leaving any “wiggle room” could be to the detriment of a sale. Rightmove data suggests that a property is 60% more likely to be marked SSTC if the property receives an offer in the first week. So over pricing with the expectation of being chipped could prove costly if in need of a swift sale. 

Old habits die hard though, so in October 2023 newly listed properties increased 0.5% making the average asking price £368,231. This may be the lowest percentage rise for the month of October since 2008 but it’s still unwise in the current market. 

                                                                                                                       

Source: Rightmove

Lonres Prime Central London Analysis

In prime central London (PCL) according to Lonres, lack of buyer demand has hit prices causing them to drop 3.1% over the year to September 2023. Market uncertainty reigns but affordability issues seem to be squeezing the £2-5m bracket the hardest. `These are predominantly family homes that have become unobtainable without lower rates and increasing child care/schooling costs on top. 

Many buyers though are simply waiting for sellers to further relent on prices whilst also waiting to see how the economy fairs over the next six months before making their move. Turning to the rental market for shelter though doesn’t come cheap as increased demand has caused PCL rents to increase; 9.3% since September 2022 to 2023.

 

Section 21 Second Reading

The announcement of a second reading of the controversial proposal to abolish section 21 notices on Monday next week, is applauded by some and criticised by others. This 2019 manifesto promise has taken a while to get properly aired due to division within the Conservative party. Many believe it pushes landlords further away at a time when the country is in need of more rental stock, whilst others are passionate about giving renters stability. Either way, PM Rishi Sunak has decided to push ahead which means there will then be a “carry-over motion” which will allow the bill to make it through into the next parliamentary session on November 7th.

 

ONS house price index for August 2023

According to the ONS, average house prices in August 2023 tiptoed up 0.2% to £291,000 however there were large discrepancies depending on where you reside in the country. The North East had the highest annual percentage increase at 3.6% whereas in the East of England, house prices decreased – 1.6% annually. Affordability issues in the more expensive regions pulling down prices counterbalancing other small increases in other areas.

     

Source:ONS

 

This was also mirrored in June 2023, as the summer lull in transactions started early as more buyers took a break from their search over the holidays. The slowdown in property transactions varied again depending on the country. England and Northern Ireland, clearly riddled with anxiety and affordability issues, saw the biggest drop in transaction volumes decreasing – 5.6% and -17.6% to Q2 in Northern Ireland. Whereas Scotland and Wales were up + 8.7%.

 

Source:ONS

The Rental Squeeze 

Lack of supply versus high demand continues to cause havoc with rental prices.  According to the ONS rents increased 5.7% over the course of the year to September 2023. In England, annual London rents increased the highest by 6.2%, whilst the North East was the lowest at 4.7%. However in Wales rents were a whooping 6.9% up on this time last year.

 

Source: ONS

 

With buyers unable to buy and landlords unable to afford their investment. This upward spiral of increasing rents has forced many first time buyers to swap a flat for a room. The hope being that they will save money and be in a better position to move quickly should prices, rates shift. Unfortunately even here they aren’t immune from rises as the average rent for a room rose 16% in the third quarter of this year compared with the same period last year.

 

OntheMarket sale to Costar

The property portal On the Market has reportedly agreed a sale to US property portal Costar for £100m making it a potentially future threat to Rightmoves’ dominance in the sales and data market arena. In response to this news shares in Rightmove fell whilst On The Market shares rose 53%. 

 

And that concluded another UK Property news recap.

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