July's market update

How has the housing market changed in 2022?

You may have heard that the housing market is still going strong after the pandemic boom, but things have changed since Covid restrictions tapered off. A popular property portal recently reported on key 2022 trends – here’s what buyers and sellers need to know.

Buyers tighten their focus

One important shift lies in how people filter search results when looking for their ideal home. Pre-Covid, browsers were more open to exploring a wider range of properties, but this is no longer the case. Instead, prospective buyers are more specific about their search criteria, with gardens higher on people’s agenda than ever before.

Location becomes more fluid

Although buyers have narrowed their search in some ways, many have widened the net when it comes to location – by 58 square miles, in fact.* It appears that home-hunters are more willing to compromise on the area to bag a home office or a bigger garden.

Cities regain their shine

During the most intense pandemic period, people abandoned crowded cities in favour of the rural dream. However, as society returns to normal, people are returning in their droves. A recent report shows that there’s been a 50% hike in countryside dwellers focusing on cities such as London, Bristol and Liverpool.**

This reversing tide has led to nearby train stations becoming a prized asset once again as buyers reassess commuting time. Likewise, apartments have regained popularity now that workers and students flock to urban centres.

What’s the takeaway?

By understanding how market trends are shifting, we can help you showcase your home to attract the right buyers. With the market in such a state of flux, it’s crucial to have an up-to-date valuation – especially if your home will benefit from the changes mentioned above.

Thinking of moving soon? Contact us today to book your valuation or discuss our marketing approach.

*Rightmove

**Compared to January 2021.

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What is fueling the ongoing house price growth?

House prices nationwide are continuing to rise at rapid rates, and although there is a low supply of stock, there was a slight increase in new homes coming to the market in June. This is good news for our future buyers. *

Latest statistics show that the number of houses available on the market is down 11% year-on-year and this scarcity stretches across all regions in the UK. Interestingly, the most significant falls in stock were recorded in the North East and London, with supply falling by 19% and 18.7% respectively. *

In line with this, rising prices are not being perceived as an issue by buyers as marketing times remain historically low, with properties being snapped up in no time at all.

What’s happening in the rental market?

Similarly to the sales sector, rents are also up year-on-year. In fact, the combination of huge demand and scarcity of homes on the market has led to an annual rise of 18.8% in average rents. *

In London we’re seeing even higher rises in rents, with the average price now 27.6% higher than this time last year. *

Have you got a property to sell or let? Find out its value today with a free, no-obligation valuation.

Section 21 evictions are to be banned

The government recently announced the launch of its new Rental Reform Bill, with the primary goal of protecting tenants and providing them with access to secure living means.

Section 21 evictions, which can also be referred to as no-fault evictions, will soon become illegal in England. Following the change, landlords will be obliged to offer a reason for reclaiming a property that houses a tenant. General bans on pets, families with children, and tenants receiving benefits will also be made illegal, with landlords being unable to refuse an applicant without good reason.

In a bid to protect tenants in unsuitable homes, the bill will standardise rental conditions, which means those tenants who currently reside in unsuitable homes, will have access to safe and secure properties.

What is next for you as a landlord?

The Rental Reform Bill is yet to be introduced and passed through Parliament, so it could be several years before the above reform is enforced.

Many landlords already provide ideal accommodation for their tenants. However, for landlords who do not abide, penalties will be put in place and local authorities will have more powers to challenge situations.

In an instance where a landlord is faced with an antisocial tenant, the bill will make it a simpler process to reclaim the property.

How will the bill affect tenants?

Currently, renters can be instructed to find a new property at short notice, which in some cases leads to high levels of stress, significant moving costs, and huge upheaval.

Under the new bill, tenants will be able to challenge unjustified changes, such as rent increases and further receive a refund for poor accommodation.

With tenants in mind, the reform is set to ease the financial pressures families are facing and further improve the rental sector.

Our Rent Guarantee Policy

Part of our responsibility in managing your property is to make sure that you are aware that your rental income can be guaranteed regardless of whether the tenant pays the rent, our Rent Guarantee service;

Indefinite cover - rent is paid in full until you get your property back
Protection backed by Rightmove - a household brand we know landlords trust
Legal costs paid for any breach of the tenancy agreement
An extra 50% of the rent paid for 3 months if the property can't be re-let due to damages or neglect caused by the tenant
Up to £50,000 paid for any one claim made on the service
Market leading mediation service, including incentives for tenants to vacate the property before court proceedings are required

If you have any questions about our Rent Guarantee policy, contact us by clicking below.

*Rightmove

Rental market growth: Latest update

According to the latest UK Rental Market Report, commissioned by a popular property portal, there has been strong year-on-year rental growth across most regions of the UK. This growth has largely been driven by high rental demand and limited supply.

1. City living

The current trends of high rental demand and limited supply are most pronounced in city centres. As students, office workers, and international tenants return, cities are experiencing a surge of post-pandemic pent-up demand.

Year-on-year growth in the rental market has been recorded at 9.1% outside London and 15.7% in London. This is a significant increase, following a decade of growth outside London which has usually hovered between 1-4%. Right now, London’s rental market is facing unprecedented demand that is outstripping supply, to the extent that tenants have reportedly been offering to pay higher rents to secure their chosen property.

2. Affordability

Average monthly rents have been estimated at £995. This is an increase from £897 per calendar month in 2021. This sharp rise in rents is stretching affordability, with the average rent now 37% of gross earnings for a tenant in sole occupancy.

London, Cambridge and Bristol appear to have the highest average rents per calendar month at the moment. Aberdeen, Newcastle and Liverpool have the lowest.

3. Duration of tenancy

On average, it takes 14 days to let a property in the UK. The usual tenancy length has been rising since 2017, with the average time between rental listings coming to the market increasing from 52 weeks in 2017, to 75 weeks in 2022.

Experts have suggested tenants may be remaining in existing properties for longer to avoid an increase in rent by moving to a new property. Certainly, tenants who secured property at a discounted rental rate during the pandemic are likely to want to retain their arrangement for as long as possible.

4. Interest rates

With rising interest rates, there is potential for renters to feel the impact of higher mortgage rates on landlords. Nevertheless, it has been suggested that most landlords will have fixed-rate mortgage deals, meaning any change in interest rates is unlikely to prompt a sudden wave of increased rents. Ultimately, local demand will determine whether landlords can pass on increased costs to tenants.

5. A return to normal levels

Rental growth is expected to slow this year, as the ‘bounce-back’ from the pandemic eases and renters feel the pinch of the cost of living crisis. Experts are predicting rental growth excluding London to be 4.5% by the end of the year. Within London, that figure has been estimated to be slightly lower, at 3.5% growth in the rental market by the end of the year.

If you would like an updated valuation or a quotation for managed services on properties within your rental portfolio, get in touch.

*Property Reporter