The latest UK property news shines a light on those landlords who are helping struggling tenants by reducing rents, even while other landlords are themselves struggling so much they have sold up and quit the buy to let market.
As average house prices continue to rise, we also take a brief look at the property market then and now.
Landlords bail out struggling tenants by reducing rents
As inflation and the rising cost of living begins to take hold, almost half of the landlords in a recent survey have reduced the rent that their struggling tenants need to pay.
A story in the Mail Online on the 2nd of June referred to 44% of surveyed landlords who said that they had reduced rents by as much as an average of £50 a month – in some cases, promising to extend that period of rent relief for more than six months.
Financial rescue packages of this order represent an average 7.6% reduction in the rent charged, according to the newspaper.
Even though many were prepared to reduce rents, 45% of landlords said that lowering the rent left them worse off financially. As a result, 38% said they would be keeping rents at the same level in the year ahead while 55% said they would probably need to increase rents – possibly across all of the properties they owned.
Taxes and restrictions make landlords quit rental market
It has long been argued that undue restrictions and a punitive tax regime will encourage landlords to leave the buy to let market. A story in Landlord Today on the 6th of June claims to have found proof that this is precisely the case.
Taking the month of March as an example, recent research has shown that there were only half the number of properties advertised for rent in 2022 compared with the same month in 2019.
Practically all of the landlords (94%) who took their property off the rental listings did so because they were selling up.
The steady number of landlords leaving the market, of course, reduces the pool of available rental properties, with the laws of supply and demand forcing up the rents that tenants must pay and leaving many with little option but to join local authority housing waiting lists.
Further imminent blows to the viability of buying to let – by way of the forthcoming Renters’ Reform Bill and ever-stricter energy efficiency requirements – are expected to make a worrying situation still worse.
Average house price hits new record high of £250,000
Despite a gradual slowing, average house prices continue to rise, reaching a new record of £250,200 in April – the first time the average price of a home in the UK has risen above £250,000.
Reporting the increase on the 30th of May, online listings website Zoopla, noted that the increase in prices in the previous 12 months represented 8.4% compared with an annual 9% to the end of March. By year’s end, analysts predict that price increases will have levelled off at around 3%.
With house prices forever on the up, more of those that are listed for sale also come with a price reduction. In April, some 5.1% of homes for sale (1 in 20) were reduced in price compared with 4.7% (1 in 22) the previous month.
Where a reduction in price is offered, the average discount is 9% of the initially advertised value – representing a deduction of some £22,500.
Then and now: the property market through the decades
An article in Today’s Conveyancer on the 3rd of June traced changes in the property market during the seven decades of the Queen’s reign:
- 1950s – the average price of a home in the UK was some £1,891 (approximately £65,000 at today’s prices) but the average take-home pay was only £10 a week – making the purchase of your own home a considerable achievement;
- 1960s – with most homes now with inside bathrooms and electricity, prices had fallen in relative terms (to £3,344, or the equivalent of today’s £60,000);
- 1970s – the beginning of the decade saw the start of the wave of consumer appliances that became commonplace (such as VHS video recorders and microwaves) with the price of a house at around £4,378 – but a sudden surge in prices saw that rise to an average £10,388 by 1975;
- 1980s – the 1980s saw a boom in property prices that had risen to an average of £33,200 for a home in 1985, yet went up by a further 16% by 1987 and a further 25% by 1988;
- 1990s – after the boom, a property crash that saw prices plummet by 20% at the beginning of this decade although recovery was not far around the corner and, by 1995, the average price of a home had crept up to £51,633;
- 2000s – the dawning of a new millennium saw the appearance of PlayStation 2 and the Xbox in many homes that now cost an average of £77,698;
- 2010s – following a surge in house prices in the first decade of the millennium, prices had reached an average of £188,566 by about 2015;
- 2020s – we started this decade with average house prices at around £215,910 whereas it has now risen to some £260,771.
As the Queen celebrated a Platinum Jubilee, a look at the property market then and now shows steadily increasing values for the homes we occupy – with prices sometimes putting on a sudden and significant surge.