Tag Archives: prices

Property transactions will plummet by 17% as seasonal slowdown approaches Landlord News, Latest Articles, Property Investment News, Property News

The UK’s property market could see transactions slide by as much as 17% come spring of next year – and the downward trend could start next month as the market winds down for the Christmas period, one property purchasing specialist says.

According to House Buyer Bureau, it found that the level of transactions seen over the last six months is already down by nearly a quarter on the previous six months.

The firm says that’s because increasing mortgage costs have dampened buyer enthusiasm.

Tough few months ahead for the nation’s homesellers

But with the property market already starting to freeze over, its latest research suggests that there are a tough few months ahead for the nation’s homesellers as the traditional market slowdown adds to a decline in market activity.

The firm has also analysed the average level of transactions seen over each month and a quarter of the year going back more than 10 years and how market activity is impacted by seasonality.

The research shows that at an average of 86,397 transactions, the final quarter of the year is the busiest for the UK property market, with the most transactions completing.

Lowest level of market activity

However, it tends to be the first quarter of the year that sees the lowest level of market activity.

Over the last 10 years, just 71,863 transactions on average were completed during Q1, marking a 17% drop on the final quarter of the previous year.

But when looking at the average number of transactions by month, the data suggests that the market slowdown looks set to kick in as soon as December.

On average, the level of transactions to complete in the month of December sits 2% below that seen in November.

This average level of monthly transactions continues to fall to an annual low of 63,974 in January, a further -26% monthly drop versus December.

‘Buyers struggle to overcome the increased cost of borrowing’

The managing director of House Buyer Bureau, Chris Hodgkinson, said: “The property market has weathered a tough period in recent weeks, and we’ve already seen the damage done in the form of dwindling buyer demand and a resulting drop in transaction levels, as buyers struggle to overcome the increased cost of borrowing.

“Unfortunately, this decline in transactions is set to get quite a bit worse before it gets any better and the impending seasonal slowdown which usually kicks in from December will only add to the woes of the nation’s homesellers.”

‘See the market start to build momentum once again’

He added: “The good news is that once this winter market freeze thaws in the spring, the nation’s buyers will emerge from hibernation, and we should see the market start to build momentum once again.

“Although this will do little to help those who are currently trying to sell and suffering from a reduced level of interest in their property.”

Landlords pay up to 7.7% more for BTLs in high demand areas Buy to Let News, Landlord News, Latest Articles, Property Investment News

Landlords looking to reduce void periods by investing in a buy-to-let within an area of high rental demand will pay an average of 6.2% more for the pleasure, research reveals.

The latest market analysis by mortgage experts, Revolution Brokers, looked at the average price for a buy-to-let investment in England and how this differs between areas with, and without, a high level of rental demand.

The figures show that investing in a high rental demand area will set you back £396,349, on average, across England.

This is a 6.2% premium compared to areas of lower rental demand, equating to an additional £23,000 on a landlord’s initial investment.

Reduce the potential of a void period between tenancies

Landlords can expect to pay the most in the South West to reduce the potential of a void period between tenancies.

At £345,908, the cost of securing a BTL property in a high rental demand area is 7.7% more compared to those in areas with lower levels of rental demand.

The East of England and North West are also home to some of the highest property price premiums for a high rental demand investment at 7.3%, followed by the South East (6.2%) and London (5.8%).

Even in Yorkshire and the Humber where this premium is at its lowest, it will still cost the average landlord 3.5% more to secure an investment property within an area of high rental demand.

‘Investing in a buy-to-let’

Almas Uddin, the founding director of Revolution Brokers, said: “When investing in a buy-to-let, the initial cost of your investment is often one of the most influential factors in the decision-making process.

“Not only do you have to be able to fund the purchase itself, but the sum spent upfront has a direct impact on the yield you will be able to return.”

He added: “However, the secondary factor is the rent you are able to generate and the consistency at which you are able to secure it.

“In high demand rental areas, not only will you be able to justify a higher rate of rent, but you will also benefit from a far lower level of void periods.”

‘Minimising void periods is an incredibly important part’

Mr Uddin continued: “Minimising void periods is an incredibly important part of maximising your investment as you can have the best yield in the world, but if you can’t fill the property with a paying tenant it doesn’t count for much.

“So, when looking to invest, landlords should always do so with a long-term view of a property, not just how much it costs, but what they can expect as a return and how easily can they rent it in the first place.”

He added: “With this in mind, paying a premium to secure a home in a high rental demand area may come at an initially higher cost, but it can pay dividends further down the line.”

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