12th
Jul 2023
A leading housing market website claims that because of private rental tenant demand outstripping housing supply could play “a key role” in curbing numbers of homes for sale which should help stop prices from freefall.
The comparison property website claims that rising rents and yields as well as shorter void periods, apparently lower than three weeks for BTL properties, is certainly an attractive proposition for those hesitating about putting their homes up for sale, and of course will keep sales market prices from dropping.
The company provides a monthly sales and rentals market round-up says rents are continually rising.
The website’s mix-adjusted average yearly rent rise for the UK is 11.8 per cent, and the West Midlands had the highest rental increase, outside of London, of more than 18 per cent.
However this pales in comparison to the top rental increases in London boroughs are Bexley – 40 per cent – Kensington – 39 per cent – and Hillingdon – 34 per cent.
The company says that homes’ price growth has levelled and unsold housing stock is higher than the last ten years’ average when reaching a 30 month high.
However it is mindful that stock levels and prices always peak during summer months so it cannot fully surmise that the Bank of England’s base rate rises is the main cause for the sales’ market instability or whether it is just the typical summer standstill.
But the firm is highly critical of the BofE’s policy and says: “Last month’s rash decision by the Bank of England to hike the base rate by a further 0.5 per cent to 5.0 per cent has certainly rattled some nerves.
“The UK property market was steadily regaining confidence in the wake of the rapid price correction at the end of last year with a return to slow growth, but now many fear that increased borrowing costs, along with negative sentiment in the media, may tip the market into a downward spiral.
“Rapidly rising stock levels are always a cause for concern. Pricing had, until now, been benefitting from low stock levels, but last month’s surge over the 10-year average gives cause for anxiety. However, stock levels were recovering from rock bottom after the Covid boom depleted agents’ portfolios to unprecedentedly low levels.”
The company does acknowledge that sales prices in some areas are still rising and the average marketing time to sell a property is not slowing down.
The firm adds: “The northern regions and Scotland and Wales continue to show considerable improvements on their July 2018 figures, while London and the Midlands, the East and South East of England show slight increases compared to their pre-Covid figures. The Typical Time on Market for the South West is unchanged from July 2018.”
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