EP141: House price show a slight increase this month but soaring rents are not good for anyone
At the risk of being a broken record once again the two biggest stories from the recent data is that some price data is actually showing a small increase in house prices. Second, rents continue to increase.
"There is positive news with the rate of inflation in the UK dropping to 4.6% from 6.7% last month. The Bank of England is under less pressure to increase interest rates, and there may be rate cuts during the first half of 2024. House prices remain resilient, defying the forecasters such as Knight Frank, Savills and Capital Economics who all predicted decreases of 10-15% during 2023." Eyeedul Haque
Key points:
1. Nationwide, Halifax and Rightmove have reported: -3.3%, -3.2% and -1.3% over the last 12 months. What is interesting is that monthly figures actually show that prices increased from last month. Nationwide and Halifax reported increases of 0.6% and 1.2% respectively.
2. ONS figures show increases of -0.1% nationally and -1.1% in London. This ONS data has a 3-month lag time, as it records the prices that properties actually sold for and is taken from data from the Land Registry. The rate of house price growth is levelling off, but certainly not in free-fall (as some headlines this week are suggesting).
3. Rents have increased by 9.6% nationally and 10.2% in London. The average monthly rent is now £1,283 nationally, and £2,192 in London. They are predicted to increase by 25% over the next 2 years, which is welcome news for landlords whose costs have increased over the past 24 months.
What is the outlook:
Eyeedul of My Property Consultant predicted that house prices would remain level 12 months ago, and have been correct. "Prices may remain constant for the next 6 months, but some areas may see slight decreases (or around 5%) but it does depend on the area and type of property. We are in a buyers’ market and there are opportunities to take advantage of. The current market conditions will not last that long, as we know that as soon as the Bank of England start to reduce rates, people will start buying property again as confidence returns. This is turn will increase house prices, hence we advise clients to purchase within the next 3-4 months. The end to end process of buying a property takes a minimum of 3 months once a property has been found."
