UK property news focuses on a slight fall in the house price index that has sparked concerns about “down valuations” of homes as banks begin to fear further falls in average prices. Yet high prices continue to lock out first-time buyers from the seaside homes they want.
In the meantime, landlords are continuing to sell off their buy to let properties even while the demand for rented accommodation soars and a London council joins forces with Airbnb to tackle fraudulent payments for illegal sub-letting.
Let’s take a closer look.
Rightmove house price index
Although the house price index has registered a minor fall – down 1.3% over the month of August – this is a regular seasonal dip in the market, suggests the online listings website Rightmove.
Buyers are enjoying their holidays rather than scouring the property market for a new home, but some sellers are offering competitive asking prices for a quicker sale and the opportunity to complete a move this side of Christmas.
While supply is improving somewhat, there is still a huge imbalance in demand, which is 4% lower than at its height last year but still some 20% higher than before the pandemic.
The recent 0.5% increase in the base lending rate is making mortgages more expensive. The average monthly repayment for a first-time buyer who put down a 10% deposit has climbed above £1,000 for the first time.
Properties suffer ‘down valuations’ as banks fear house price falls
Surveyors and valuers are “down valuing” properties in some parts of the country in anticipation of a further fall in house prices, according to a story in the Telegraph newspaper on the 23rd of August.
In some cases, sales have already been agreed but banks and mortgages have then refused to grant sufficient advances to cover the price and that has left potential buyers scrabbling desperately for the cash.
Inflation and the current crisis in the cost of living are likely to herald an end to the post-pandemic house market boom, some banks and building societies appear to believe.
First-time buyers struggle to buy near the sea as house prices rise
Nonetheless, first-time buyers continue to be priced out of the housing market in their chosen spots beside the seaside, according to a story in the Daily Mail on the 24th of August.
Homes along Britain’s coasts became especially sought-after in the immediate aftermath of the pandemic and prices shot up accordingly. Salaries – and those of first-time buyers in particular – have simply failed to keep up.
Recent analysis suggests that among the top ten locations to have suffered declining affordability for first-time buyers at least half were in, or close to, coastal resorts.
An example is provided by the location that appeared top of that particular list. This was Adur in West Sussex, where the average price for a typical home bought by a first-time buyer is now more than 11 times the average salary for the area – before the pandemic, in 2019, it was recorded as less than 9 times.
NRLA: Regional research findings reveal state of UK’s supply crisis
The demand for rental accommodation across the whole of the UK has reached record proportions, said the National Residential Landlords Association (NRLA) in a posting on the 19th of August. Yet nearly a quarter of NRLA members say they intend to sell all or some of their buy to let properties in the coming year.
Not only does this spell a serious supply crisis for the private rented sector but rents are also rocketing in response. According to a report by the BBC on the 19th of August, as many as four in ten young tenants under 30 are now having to pay at least 30% of their income in rent.
In the view of both the BBC and the NRLA, rents at these levels are unaffordable.
Illegal Airbnb sub-letting payments to be identified
The London Borough of Kensington and Chelsea has joined forces with Airbnb in an attempted crackdown on the illegal short-term letting of homes on two of the borough’s housing estates, reported Landlord Today on the 24th of August.
Airbnb has been granted court dispensation – necessary to comply with the General Data Protection Regulation (GDPR) currently in force throughout Europe and the UK – to provide the council with data relating to payments made through the illegal sub-letting of social housing flats.
Thanks to the joint operations, in July the council was able to “recover” and return to tenants in housing need, four separate homes that had previously been illegally sub-let and occupied.