Post election update

With so many distractions last month, from the football to the elections, it is no surprise to find that prices in the housing market were down but only slightly. Rightmove reports they fell by 0.4% in June and Halifax’s index fell by 0.2%. Nationwide’s was up by +0.2%.

Now the election (and the Euros) is over, any uncertainty over the outcome has been banished and activity is likely to quickly return to more normal levels. Before the election, buyers had been waiting for the base rate to fall, prices had been subdued but stable and that trend looks set to continue.

Amanda Bryden, Head of Mortgages, Halifax, said:

“Mortgage affordability is still the biggest challenge facing both homebuyers and those coming to the end of fixed-term deals. This issue is likely to be eased gradually, through a combination of lower interest rates, rising incomes, and more restrained growth in house prices.”

Despite the brief election hiatus, Rightmove is still reporting relatively healthy levels of activity - the number of sales being agreed is 15% above the same period a year ago when mortgage rates were approaching their peak. In addition, the number of new sellers coming to market is 3% above last year. There has though been a slight drop (-2%) in demand in the affordability-stretched first-time buyer sector.

Perhaps the best news, however, is Labour’s pledge in the King’s Speech to try and tackle the UK’s chronic housing shortage by building 1.5 million homes over the next 5 years. It’s an ambitious target, but one that will be welcomed by the vast majority of those in the property industry.

HOUSE PRICES AND STATISTICS

Although there were quite a few indices reporting monthly falls, annually, house prices remain steady.

Nationwide: June: Avge. price £266,064. Monthly change +0.2%. Annual change +1.5%
Halifax: June. Avge. price 283,804. Monthly change -0.2%. Annual change +1.6%
Land Registry: May: Avge. price £285,201. Monthly change +1.2%. Annual change +2.2%
Zoopla: May: Avge. price £264,900. Annual change 0.0%
Rightmove: July: Avge. price £375,110. Monthly change -0.4%. Annual change +0.4% (asking prices on Rightmove)

BUY-TO-LET

Rents bucked the election slowdown trend, with the average outside London rising to a new quarterly record of £1,314 per calendar month (pcm) - some 7% higher than they were last year (£1,231 pcm). Rental growth continues to slow in London, although it did still manage to hit a record high of £2,661, which was 4% higher than last year (£2,567 pcm), but is some way short of its peak of 16% in 2022 (source: Rightmove).

The biggest news in the rental market has been Labour’s pledge to implement the Conservative’s Rental Reform Bill. The changes include:

1) The Abolition no-fault evictions
2) Tenants to be given the power to challenge rent increases that are designed to force them out
3) Agents and landlords to be prevented from instigating bidding wars;
4) Renters to be given the right to request to be able to keep a pet, but also landlords will get the power to request tenants take out pet damage insurance
5) Decent homes standard’ to be applied to the PRS
6) Awaab’s law to be extended to cover the Private Rented Sector, which will punish agents or landlords who don’t fix damp and mould problems promptly
7) The Creation of an online database of landlords and their properties

If you are thinking about investing in the housing market, why not take a look at some of the fabulous properties we have coming up in our next auction at Phillip Arnold Auctions.

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