We have had the latest Hometrack house price index report released this week and it paints a similar picture to the last one, supply is low and demand is high meaning prices continue to rise. Interestingly, this months report has provided a forecast of sales completions and they predict it to reach 1.5 million this year, up from 1.04 million last year and the highest level since 2007.
It looks like this market isn’t cooling anytime soon.
Now, let’s take a look at the headlines that caught our attention this week, I always try to summarise the links to save you having to click through.
- BTL mortgage rates fall to lowest level since start of 2021 – Good news for landlords looking to remortgage and this may encourage new investors to enter the market, the average two and five year fixed rates have fallen since the start of May and are currently at their lowest levels since the beginning of this year. Moneyfacts research into the BTL mortgage market has found that since the start of this month, the average two year fixed BTL rate has fallen by 0.04%, down from 2.99% on the 1st May to 2.95% on the 21st May. Meanwhile, the average five year fixed BTL rate has fallen by 0.05% during this same period, down from 3.35% to 3.30%.
- Buyers are making offers on homes before viewing amid booming market – This just sums up the desperation for property buyers in the current market conditions. BBC Wales Live reports that many estate agents in Wales are selling properties within hours of listing them, sometimes with multiple offers on the table. This is a trend also identified in some other UK hotspots. With demand incredibly high and stock levels low, buyers are now looking at new ways they can gain an advantage over their competition which has led to a growing number of buyers even offering on properties before viewing them. The term ‘mad market’ is becoming popular among estate agents.
- Rental White Paper – government gives hint of what it will contain – So you would have seen me mention this new rental white paper that the government has pledged to bring forward in a previous weekly newsletter and now we have a sneak peek at what it might contain. It came from a government response to a House of Commons committee. There is no surprise to see the removal of Section 21, amending Section 8 of the Housing Act 1988 along with improving the possession process in the courts and the ‘lifetime’ deposit model mentioned. They also mentioned, requiring landlords to be part of a redress scheme and reforms to encourage improved property conditions.
- Nationwide predicts UK prices will continue to rise – This is a polar opposite to what they were predicting in December 2020 where they said that “housing market activity is likely to slow in the coming quarters, perhaps sharply”. As you can see from the headline they now say “house prices would continue to rise this year beyond the stamp duty holiday” and they highlighted that this may make it even harder for first-time buyers to get on the property ladder. Figures published by the Office for National Statistics this week showed house prices rose 10.2% in the year to March, the highest annual increase since the lead-up to the financial crisis in August 2007. It will be interesting to see where we are with house prices a year from now.
That is all we have for you this week. If you have any comments or questions on this week’s news summary then please feel free to send us an email at [email protected] – if not, see you next week.