Zoopla has various areas in the market that they believe will stay strong.
The sales demand for 2021 in the first part of five months was extremely high mainly due to the stamp duty being reduced. This level came down in the May, June and July but has stayed steady for the rest of 2021 and they expect it to carry on into 2022.
Over the past five years the average time it takes for a property to sell on the open market has reduced dramatically from 50 days to an average of approximately 25 days. Coming down by 50%.
This shows how busy the market currently is. The only area that has currently lagged behind the rest of the United Kingdom is probably London. This also means that the total stock that most Estate Agents currently hold is a lot less than there has been in the past driving even further the demand for property. There has been a record level of sales throughout the whole of 2021 but stock is a real issue for most Estate Agents.
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Has the pandemic changed peoples views?
The pandemic trend has further to run with 22% of consumers as confirmed by Zoopla are still eager to move. There has been a large increase in home owner equity over 2021 and there is more room for price growth in most affordable markets. Whilst there has been a problem with the mortgage market this has now become much more competitive and has started to have a lot more available mortgages on the market.
Zoopla believes that the annual house price will start to slow down in 2022. They believe that this will be approximately 5% for the overall 2021 and then slowing down to 3% in 2022. Obviously, this is subject to what happens with the interest rates. They believe that this could have a massive effect on prices and confidence in the market. Obviously any form of movement up in the interest rates is a high figure for most people. Whilst when interest rates were at 10-15% a movement up and down wasn’t so dramatic as it is when they are so low now. However, there is evidence from the Bank of England together with other lenders that they are looking to push interest rates up from their very historic low.
Zoopla believe there has been a massive shift in the buyer types in the last year. There have been a huge amount of buy to let mortgage now moved into the market by up to 10%. First time buyer mortgages have dropped by nearly 30%. The existing owners with a mortgage has gone up by 37% and a cash investor owner by 24% which is the average that there has been. This shows that there are definite trends changing in the market. The main problems with first time buyers is that the lower end where mortgages are for people with small deposits has been problematical. A lot of the building societies and banks withdrew their 90-95% and these are slowly coming back to the market.
What has happened to the lettings market?
A demand in the lettings market has gone up by at least 20%. The let agreed has gone up by 10% but the flow of new property has come down and the available stock has come down quite dramatically. Up to 15%. Because there is a lack of supply these are more acute than in sales. Rental growth has hit new heights in outside cities which are rebounding. The landlords continue to rationalise their portfolios and many see it as an opportunity to go back into the market.
Rental growth outside London is 5.5% to the year of August but down in London by 1%. 8% of homes for sales have previously in the rental market up from 3% in 2018 increasing the complexity of legalisation.
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Did you know that in 2019 there were 120,000 properties on the rental market. This year as of 2022 there are currently only 50,000. This means that the rental property throughout the United Kingdom has reduced quite dramatically and has meant rental prices have now increased. Anywhere between 10-30% in some places. The lack of property is driving demand.
New White paper – Levelling up.
What does it mean for landlords? There is a new white paper about to be sent out by the Government to try and deal with more reforms within the housing market.
This includes provisions such as a national landlord register, property redress, greater standards on homes and more provisions for tenants to either complain or get compensation. The Government are going from pro-landlord to pro-tenant in future.
They will also be allowing you to apply for planning permission on an easier basis and will be looking to build a lot more affordable homes.
Did you know that we deal with all types of insurances from antiques, collectables, rent guarantee insurance, product liability, accidental damage, contents cover and much more. So why not contact us. We also can deal with small business insurance and a lot of our policies will cover loss of rent. Contact us for a quote for either your residential or commercial property on 01273 827090. We would love to have the opportunity to discuss with you any type of insurance you may require even up to professional indemnity.
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The laws in the next 12 months will be forever changing again for landlords with the renters reform bill due to come back to parliament and it is important that landlords are aware of their legal requirements. There have been more and more cases for landlords where they are not aware of the law and this could potentially lead to massive fines from local authorities and claims from tenants. We always advise that you are aware of what your legal requirements are. This could potentially affect any claims.
With the current Covid situation as it is many business will potentially have problems over the next 12 months which could extend to tenants having issues.