Here is the latest edition of the Property Options’ monthly update on the UK Buy To Let (BTL) market.
House Prices
The latest figures from the Halifax Building Society indicate that average house price in the UK increased by 1.4 % in October, the biggest monthly rise since March. This follows monthly falls in July and August and a slight increase in September of 0.3%.
On a rolling three month basis year on year growth in the quarter to the end of October was 5.2% down from 5.8% in the previous quarter.
The Royal Institute of Charted Surveyors (RICS) attributed the October increase in house prices to increased buyer demand due to low mortgage rates and a record shortage of homes on the market. The Bank of England reported that mortgage approvals rose to a three month high in September.
Halifax Housing Economist Martin Ellis pointed out that a slowdown in house price growth was not unexpected and there are factors other than Brexit. He added that the current slowdown appears to largely due to to mounting affordability pressures.
However looking to the medium term a recent report from Savills anticipates low house price growth for the next two years because of uncertainty due to Brexit.
A recovery in house price growth is forecast in 2019.
Rents
In a recent report Countrywide Estate Agents forecast that rents will rise by 3.5% for new tenants by the end of this year. The report notes that cost of renting a room in increasing at twice the rate of renting a house from an average of £488 in September 2015 to £504 in September this year.
There are regional variations in rental growth with rents for new tenants rising fastest in the north at around 5% in cities such as Manchester, Leeds and Liverpool.
In the long run Countrywide predicts that the proportion of British households renting will increase from 21% to 28% by 2018 and that demand will outstrip supply, further pushing up rents. The report from Savills predicts that rents will rise by 2.5% in 2017 and 4% in 2018.
Conclusion
In the medium term Brexit will dampen house price growth, but the rental market remains strong.
The next Property Options update will explore how these factors will impact on the Bristol buy to let market.
We will all be discussing the latest position on the property market in Bristol and across the UK at our next PIM on 24 November 2016 at Holiday Inn, Bristol City Centre, 6-9 pm.
We hope you will join us then.
For more info and to reserve your place Click Below
Property Options Bristol
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