As winter approaches we can take stock of the trends we have seen over the spring and summer this year, and look forward to what 2019 and beyond are likely to hold for the housing market.
Average house prices in the UK have risen by 3.1% in since last October, and RICS’ Residential Market Survey has indicated that price growth will remain stable. Although London has seen lower growth than much of the country, the late summer appears to have seen a rise in demand for sales properties, as the Bank of England report that mortgages approved for new home purchases was 3.3% higher during the summer (June-August) compared to spring (March-May).
This rise in demand has been matched by a recent spike in available properties, as Rightmove has reported a 16% increase in the number of newly-listed properties on its site in the first week of September in comparison to the average of the final three weeks of summer.
Sales volumes, however, continue to be muted, with roughly 2.6% fewer transactions occurring in August than in the same month last year. This is not to say that the market is totally sluggish in West London. Over the last quarter, £704 million worth of property has been sold.
In the lettings market, average rents across Britain have increased by 0.9% in the last year, but in London they remain lower than they were in October 2017. Rent growth is expected to rise here for the next five years, however, to outstrip that of the sales market – RICS predict that rents will increase at 3% per annum in comparison to the sales market’s 2%.
RICS believe that changes to policy surrounding rental property, such as rises in stamp duty, will result in more landlords leaving the market than joining. Consequently, the supply of rental property will fall and prices will rise.
Tenants are therefore encouraged to seek longer-term lets, as this will help them to avoid the annual rental increases faced by those who move home more frequently. Landlords, too, appear to be more interested in longer lets at the moment, especially if they have reliable tenants, as longer lets ensure that occupancy rates are consistently higher.