Landlord Exodus and Shifting Dynamics is having serious effects on the property market
The UK housing market continues to face significant challenges and changes, according to the latest data and analysis. Here are some insights on key trends affecting both buyers and sellers.
Landlord Exodus Accelerates
One of the most notable developments is the accelerating exodus of landlords from the private rental sector. A recent survey of 1,500 landlords and letting agents revealed that nearly half have already sold some of their rental properties or plan to do so within the next year.
The primary driver appears to be incoming legislation, particularly the Renters’ Rights Bill and the proposed abolition of Section 21 “no fault” evictions. Over half of landlords cited these regulatory changes as their main reason for exiting the market.
This trend is leading to a significant increase in available housing stock in some areas. Coastal and rural regions, including areas around Truro, Exeter, Bournemouth, Lincoln and Norwich have seen available supply jump by over 40% compared to last year.
The flood of rental properties hitting the market is keeping price growth in check, with annual house price growth turning negative in these areas. For prospective buyers, this may present opportunities, especially for chain-free purchases.
Regional Price Variations Persist
While the average UK house price has risen marginally by 0.7% year-on-year according to Zoopla’s latest index, there are stark regional differences. Scotland is showing the strongest growth at 2.1%, while prices in the South West, South East and East of England are lower than a year ago.
Breaking it down further by property type reveals even more variation. Flats have seen minimal growth of just £20 on average over the past year, while terraced houses have increased by 1.4%.
Affordability Remains Key Constraint
Despite some easing in mortgage rates, which have fallen to their lowest levels in 15 months, affordability remains a major constraint on house price growth, especially in Southern England where values are already high.
Buyer demand has increased by 26% compared to last year, but buyers remain price sensitive. This is helping to keep price inflation in check, even as sales activity picks up.
Looking Ahead
The outlook for the housing market remains uncertain. While some experts predict modest price growth and steady sales, others, including Lamming, are more pessimistic about the broader economic picture.
Potential interest rate cuts hinted at by Bank of England Governor Andrew Bailey could provide some relief for borrowers. However, geopolitical tensions, particularly in the Middle East, pose a risk to inflation and could impact the Bank’s ability to lower rates.
For those considering a move, I would advise caution and thorough preparation. Buyers should secure mortgage agreements in principle and select conveyancers before making offers. Sellers are urged to price realistically and focus on attracting competing bidders rather than setting inflated asking prices.
As the market continues to evolve, staying informed and seeking professional advice remain crucial for navigating the complexities of buying or selling a home in the current climate.