Spring is one of the busiest times in property. When forming a snapshot of current conditions, we overlay our own data with that of the industry’s leading organisations. The last four weeks show the market is moving in the right direction.
Mortgage rates that decreased in the early months of 2023 are thought to be behind an increase in market activity. Zoopla found the number of new sales agreed in May was 11% higher than the five-year average. Purchasers also experienced an improved choice of homes for sale – up 16% on the five-year average.
Surprise jump in May asking prices
More buyers and sellers in May resulted in a new record asking price of £372,894, according to Rightmove. The portal said it usually sees the average asking price rise 1% in May but in 2023, the average almost doubled. May’s 1.8% increase dovetailed with a 3% rise in more people viewing properties in May, compared to the same period before the pandemic.
Viewing requests start to rise
Portal activity is starting to transfer to estate agency branches. Propertymark’s latest report represents business in more than 200 estate and letting agency branches. It found the number of viewings per property was 3.3. This was compared to 1.8 in December 2022.
Propertymark also found the average number of sales agreed per member’s branch was 8 in April – the same as in March – and a figure that reflects the pre-pandemic average. There was also a 70% increase in the number of properties available for sale in April 2023, when compared to the same month last year.
Zoopla’s figures show some of those newly listed properties belonged to landlords. Its data revealed 1 in 10 homes listed were previously rented out. Interestingly, these ex-rentals have an asking price 25% lower than owner-occupier properties – an average of £190,000 versus £250,000.
The importance of pricing realistically was also highlighted by the portal. Zoopla’s analysis found 18% of homes listed on its site had the asking price cut by 5% or more. With the reduction typically coming in the first 8 weeks of marketing, it has never been more important to heed the valuation advice of a local estate agent.
Another element in the property market that is rising is the number of new prospective tenants. In April, Propertymark found this figure rose to 118 tenants per branch. For comparison, it was 64 in December 2022 and the 118 figure was 24% higher than in April 2022. Flatlining is the number of rental properties available. The average was nine homes available to rent per branch – the same as in April 2022.
Rents continue to creep upwards
With more tenants and no increase in available rentals, it’s no surprise that rents for new tenancies are increasing. HomeLet’s latest Rental Index, which reflects April activity, revealed rents had risen in every UK region. Costs rose 1.3% between March and April this year, leaving the average UK rent at £1,199 per month.
With the renter’s Reform Bill now making its way through Parliament, we’re monitoring the effect it will have on landlords and the supply of rental properties. We feel the contents of the Bill can be successfully implemented with professional property management and some advance planning, and there’s already evidence of thinking ahead.
Landlords start planning for pet owners
One of the Bill’s proposals is to make it easier for pet owners to rent. If adopted, landlords will have to have a compelling reason for rejecting renters with domestic animals. With this in mind, Mortgage for Business questioned a number of landlords on their plans.
Fifty percent were prepared to increase the size of a tenant’s deposit to mitigate the effects of a pet in their property, while 60% would have insurance in place to cover pet damage. Rent increases were in the plans of 17% of landlords preparing to accept pets.
If you would like to know more about your local property market, please get in touch.
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