April Property Market Analysis
March was a month of small but significant announcements. The Budget failed to deliver anything spectacular property wise but there were two points that may help home movers. The first is the continuation of the Energy Price Guarantee across Great Britain and the £2,500 threshold remains until July.
In England, children as young as nine months will soon qualify for 30 hours of free childcare. Its phased introduction from April 2024 has already made waves in the mortgage market. Childcare costs are usually part of a lender’s affordability checks, so fewer outgoings should improve a borrower’s prospects. As childcare funding is a devolved matter, the Governments in Wales and Scotland will decide if they follow suit.
What’s going up?
Sellers will love the news that buyer demand is rising. Recent figures from Rightmove show more people intend to move, with a 6% increase in potential purchasers in March compared to the same period in 2019. For reference, the portal discounts the two pandemic years in which an artificial market prevailed.
Cautious recovery for house prices
Rightmove’s analysis revealed the average value of a property coming to market rose by 0.8% in March. Asking prices for the biggest, top-of-the-ladder homes lead the way, with a 1.2% increase. First-time buyer properties and second stepper homes were the least affected, with 0.4% and 0.5% rises, respectively.
Another interesting statistic from Rightmove’s March House Price Index was a new average ‘coming to market’ price of £365,357. Additionally, there was a revised national average of how long it takes to find a buyer. In February, this was 57 days – down from 62 in January 2023.
The index also showed the number of properties held per agent was creeping up. This rose from 42 properties in January to 43 in February, including those under offer and sold subject to contracts. For comparison, the figure was 41 in February last year.
Home movers tracking the interest rate will have noted the Bank of England’s March action, which affects the whole of the UK. While the rate rose from 4% to 4.25%, mortgage lenders were quick to diffuse panic. In fact, Nationwide announced cuts to its mortgage rates on the same day as the Bank’s decision.
Mortgage rates continue to trend downwards. A quick snapshot of the home loan market, using Moneyfacts.co.uk data, shows there are a wealth of mortgages for those remortgaging, first-time buyers and buy-to-let investors - all around 4%. This even includes 95% loan-to-value products.
Rent rises recorded across the UK
What is persistently going up are rental values. A report released by the Office for National Statistics in March revealed rents continue to rise as 2023 progresses. It found private rental values in the UK rose by 4.7% in the 12 months to February 2023. This was up from 4.4% in the 12 months to January 2023.
ARLA Propertymark’s latest lettings report was published two days before the above. It also cast light on the current private rental market. When it comes to rising rents, 50% of its member agents reported rents becoming more expensive month by month.
Competition for rentals remains fierce
Tenants can also expect a battle on their hands when looking to secure a property. ARLA Propertymark’s members say they have an average of 10 tenants registered for each available rental property. This equates to 91 new prospective tenants registered with branches every month.
March also saw the Government update the How to Rent guide issued by English landlords. The revised document must be used when creating new tenancies and renewing existing contracts. Prescribed information remains unchained in Scotland but in Wales, landlords are still adjusting to The Renting Homes (Wales) Act 2016. Landlords now need to issue ‘occupation contracts’ when new tenancies start, or convert current contracts and provide a copy of the written statement to existing contract holders (the new name for tenants) by 1st June 2023.
If you would like to know more about your local property market, please get in touch.
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