Where’s the UK Property Market ‘At’ Right Now?
Tooting Bec Letting Agents SW London for Morden, Balham and Wimbledon
The cost of living crisis, escalating utility bills and the possibility of a recession any time soon – it doesn’t bode well for the economy. But how is it affecting the property market?
Unlike other commercial sectors which had a miserable time during the two years of on-off lockdowns as a result of the pandemic, the UK housing market flourished. House prices have risen by as much as £30,000 over the past year, according to the latest figures by the Halifax. And if you think that’s impressive, consider the fact that property has risen in value by as much as 60 per cent over the past decade. That’s astounding.
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Are you looking to sell a property or a tenant looking to rent in the Tooting Bec, Blaham, Morden and Wimbledon areas? If so, call the team today on 020 8767 6181. Or, drop us an email via our Contact Form. We offer Landlord property management services different to any other letting agency in South West London – the company founder was a tenant with a poor landlord. Next Step Estates are specialists at matching great tenants with great properties, as the connection between the Landlord and the person renting, we always go above and beyond as problem solvers with prompt communication 7 days a week.
Property to Let – Balham and Morden Buy to Let House Prices On The Rise
Property prices are still rising – but at a slower rate – and house prices are still rising on a monthly basis, albeit at a much slower rate than has been typical since 2020. In fact, house prices went up by 0.4 per cent in August compared to a typical monthly rise of 0.5 per cent this year. Annual growth also fell – to 11.5 per cent in August from 11.8 per cent in July.
Still, the cost of the average UK property is £294,260, says the Halifax. And there are no signs of a price fall any time soon, thanks to there being such an undersupply of property compared to demand. Those 300,000 homes Boris Johnston and the Tory party promised they’d build every year back in summer 2019? It’s a target they’ve never reached yet.
Back to September 2022 and some of the reasons the property market was so busy over the past couple of years, no longer exist, of course. It was Rishi Sunak’s stamp duty holiday which propelled the property boom – and which is now a distant memory. At the time of its introduction in July 2020 lockdown had already encouraged many city dwellers to look for coastal or countryside homes, while working from home meant many homeowners were keen to upgrade to a home with an additional bedroom which they could then turn in to an office. Conditions were ripe for a flourishing property market – especially when you consider the historically low mortgage interest rates.
Tooting and SW London mortgage rates expected to rise again
However, mortgage rates are rising – and keep rising. Householder are being forced to tighten their spending. The Bank of England’s monetary policy committee’s base rate is currently 1.75 per cent (the highest in 13 years) but economists expect it jump to 2.25 per cent next time they meet (at some point this month). The further increase will again impact on mortgage payments as homeowners on tracker mortgages and variable interest rate home loans see their monthly payments rocket.
Inflation, which was sitting at 10.1 per cent in June could reach as much as 18 per cent by the start of 2023, according to some economists. An energy cap has been announced for October’s utility bills, but it still sits at £2.500 – doubling most householder’s bills compared to the previous year. And with utility costs also hitting businesses hard, the fear of unemployment sits around the corner.
Tenancy Rental prices increase over past 12 months – Lowest Growth in London
And what of the rental market? Latest Office for National Statistics (ONS) figures from their Private Housing Rental Index show that the average UK rent increased by three per cent between June 2021 and June this year. The figure for England was 2.9 per cent. In London the growth was lowest at 1.7 per cent whereas landlords in East Midlands imposed the highest growth at 4.3 per cent.
Housebuilders and New Builds see a fall in reservations
They may have made impressive profits of £1 billion this year, but Britain’s biggest house builder Barratts is also seeing a downturn in reservations for New Build homes. Quite a substantial downtown in fact, from 0.82 per available to unit to 0.6. That’s even lower than before the pandemic when the figure was 0.7 per unit.
The developers were also having to cope with the first-time buyer scheme Help to Buy being withdrawn by the government – and not so far replaced. There are also more expensive build costs due to higher inflation and continuing supply problems.
Land Register undergo a digital transformation
There’s one bright spot on the horizon for home buyers and sellers though (not to mention surveyors and conveyancers). And that’s the introduction of the government’s three-year digital transformation project for the Land Registry office. The aim being to make buying and selling properties quicker and easier by putting the process online.