0:01 AM, 9th February 2023, About 2 months ago 2
The latest report from RICS makes for grim reading for landlords and homeowners with news that sales and house prices continued to decline across the residential market in January.
In addition, landlords continue to flee the sector for the tenth consecutive month, while tenant demand continues growing.
On top of that, house prices fell with every region seeing price falls – the East Midlands and South East being hardest hit.
The month also saw the number of buyers and sellers falling, along with agreed sales.
The RICS survey also found that 64% of its members believe that Build to Rent will play a bigger role in the PRS – but not in the short term.
Simon Rubinsohn, RICS’ chief economist, said: “Meanwhile, the rental market continues to show strong interest from tenants and the limited stock available is keeping a firm momentum to rental growth.
“While Build to Rent clearly has a role to play in helping to fill this gap, the insights from the latest survey suggest that this is not going to be sufficient, at least in the near term, to address the challenge in this market.”
Sarah Coles, the senior personal finance analyst at Hargreaves Lansdown, said: “Landlords continued to sell up and leave the market and some have decided to cash in while property prices are higher, others are getting out of the business because rising mortgage rates means they can no longer make the sums add up.
“They’re also being pushed out by punishing tax rules and tougher landlord legislation – both of which mean higher costs.”
Ms Coles highlights that tenant numbers are still rising but there are fewer rental properties, so rents are going up.
She added: “It means that if you’re moving properties, there may be little scope for negotiation because there are an average of six people competing for each home.”
She says that tenants could try to negotiate a lower rent rise because the landlord may be tempted to keep a reliable tenant in place.
The January 2023 UK Residential Survey from RICS points to a muted housing market and things are unlikely to change soon as the sector adjusts to higher interest rates.
Mr Rubinsohn said: “Although some respondents have noted a little more interest in the housing market as the new year got underway, the overall tone of the feedback still remains subdued which is not altogether surprising given the jump in mortgage rates since the autumn.
“Prices, meanwhile, are now beginning to reflect the shift in balance between demand and supply.
“However, it is questionable how much downside to pricing there is likely to be given that recent macro forecasts from the Bank of England and others are now envisaging a less harsh economic environment this year.”
Ms Coles said: “January was deathly for the property market. Despite falling mortgage rates, buyers and sellers gave up the ghost, with buyer numbers continuing to fade for the ninth month in a row.
“Meanwhile, house prices declined for the fourth consecutive month – and the proportion of agents reporting house price falls rose again.”
She added that the RICS report offers a more accurate view than other indices because it measures the price of homes among sales being agreed that month.
That means there’s not the usual lag for three months or more while sales translate into property completions.
She continued: “The most recent RICS data indicates that we can expect a steady flow of bad news about house prices well into the spring.
“Estate agents aren’t convinced the picture will change in a hurry.
“They expect the market to stay quiet and for prices to keep declining, as buyers get to grips with higher mortgage rates and the prospect of a falling market.”
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11:30 AM, 9th February 2023, About 2 months ago
But yesterday the Halifax said everything was great?
13:21 PM, 9th February 2023, About 2 months ago
This is a much more accurate account of what is going on in the PRS compared to the Guff that was printed yesterday.