We often talk about seasonality in property and this autumn has been true to form. September saw serious movers enter the market after summer and their intent is already reflected in October’s figures. Firstly, we look at asking prices.
Rightmove’s October House Price Index revealed new-to-market sellers are growing in confidence. The average asking price increased by 0.5% in the last month and is now £368,231. This is £1,950 more than in September.
Buyer numbers increase during October.
There was also news about potential purchasers. Rightmove says the number of buyers enquiring about properties for sale is 8% higher than the same month in 2019. The portal uses 2019 as it’s widely considered the last ‘normal’ spell of trading conditions before the pandemic.
Unexpected house price uplift.
While asking prices reflect sellers’ initial confidence, the eventual sold price is a truer reflection of the market. Therefore, Nationwide’s October House Price Index took experts by surprise. It showed house prices have unexpectedly recovered.
According to the building society, UK house prices rose 0.9% during October. For reference, house prices increased by a marginal 0.1% during September. As a result, the UK’s new average house price is £259,423.
Those intending to purchase with a mortgage will have followed the Bank of England’s latest interest rate decision. On 2nd November 2023, it announced the interest rate was being held at 5.25%. Many lenders had already cut mortgage rates ahead of the news.
HSBC was one, reducing the interest rate on some residential, first-time buyer and buy-to-let mortgages. The Mortgage Works, NatWest, Barclays and Leeds Building Society had also announced rate reductions at the end of October. Fixed-rate mortgages continue to be offered with rates in the region of 5%.
We’re anticipating more mortgage news in November, when the Chancellor delivers his Autumn Statement. With an election expected in the next year, Jeremy Hunt is expected to win over voters by extending the Mortgage Guarantee Scheme. This initiative, which encourages lenders to loan to buyers with 5% deposits – was due to expire at the end of 2023. A year’s extension has been muted.
Tenant numbers continue to dwarf available rentals.
Focusing on the rental market and news from Rightmove may ignite the competitive streak among tenants. The portal’s analysis shows letting agents are, on average, receiving 25 enquiries for every available property. For comparison, each available rental received just eight enquiries in 2019.
With demand still strong, it’s no surprise that 76% of tenants found it difficult to find a rental property, according to Goodlord and Vouch’s State of the Lettings Industry report 2023. A separate article, posted on Property Reporter, came to a similar conclusion. It found 22% of tenants struggled to find a rental property within their desired location, while 17% couldn’t find a property of a suitable size.
Bank of Mum & Dad help with renting.
The same article also highlighted how set up costs are troubling tenants. Of those questioned, 46% required additional financial assistance. In detail, 15% had asked their parents for help to cover upfront rental costs, while 54% said they’d dipped into savings to fund a security deposit.
The supply of rentals may improve following a recent announcement. Ahead of the Renters’ Reform Bill’s second reading in October, the Government confirmed the ban on Section 21 evictions would be delayed indefinitely. The update may hopefully convince landlords to stay in the private rental sector and encourage new ones to join.
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