House prices slide as landlords sell up

Property values are sliding as landlords sell up low yielding properties in London and the southern counties, one index reveals.

According to Home.co.uk’s February asking price index, former rented homes are now flooding the market.

That is leading to sellers in Greater London and southern England to cut prices to stand out amid a glut of available properties.

This time of year might signal a slight increase in prices, but the national average asking price has unexpectedly dipped since January.

The index found that the steepest declines are concentrated in the capital, alongside the South East and South West.

Those price falls have brought the average market price down by 0.1% year-on-year.

Meanwhile, the picture couldn’t be more different further north and in regions like Yorkshire, which posted a robust 0.8% monthly rise.

Buyers in Scotland are also seeing vendors holding firm on their valuations – helped by a lot of buyer interest.

Influx of former rental homes

However, buyer demand in the south is struggling to keep pace with this influx of former rental homes.

The platform warns that there’s little hope of a quick turnaround in prices.

For shrewd buyers, this spells opportunity, and discounts can be found in some hotspots.

House.co.uk says: “In certain postal districts of London and the South East, rental yields are less than 3%; certainly not enough to pay a significant mortgage and all the other associated expenses.

“Meanwhile, savvy investors can find yields as high as 12% in certain postal districts, all of which are to be found in the North.

“These are the key factors driving the current market.”

Rate of supply return to normal

Home.co.uk asks: “The question that is difficult to answer is: When will the rate of supply return to more normal levels?

“Undoubtedly, the relative performance of the private rented sector (PRS) is a key factor in the North-South divide.

“Yields remain significantly better in the North and this factor does not look set to change soon.”

It goes on: “Since rental returns fundamentally underpin the value of property, the answer may well be: When yields return to a tenable level for investors.

“Logically, this would only be achieved through a combination of rising rents and falling prices.”

If you would like to discuss quickly selling your rental property with experts, contact Landlord Sales Agency:

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