UK Sales Market Update

Welcome to our Property Market blog, where we provide you with insightful information on the latest trends in the housing market. In this edition, we'll focus on the sales market, highlighting key statistics and offering valuable insights for both buyers and sellers.

1. Transaction Stats:

In January 2023, there was a 10% reduction in property sales recorded year on year, while new home purchases saw a 9% rise in completions. Mortgage approvals experienced a significant 46% reduction, with gross lending down approximately 7%. The decrease in mortgage approvals from the second half of the previous year largely explains the significant difference in lending statistics.

2. Buyer Demand:

According to the latest ARLA Housing Insight Report, there was a 30% fall in the number of prospective buyers registered across member branches in April 2023 compared to April 2022. Additionally, member branches reported a 70% increase in properties available for sale year-on-year. These figures indicate a drop in buyer demand, likely influenced by higher mortgage rates and economic challenges affecting affordability.

3. Market Activity and Pricing:

Rightmove reported that agreed sales numbers are currently just 3% behind the pre-pandemic market of 2019. The average price of properties coming to the market experienced a 1.8% month-on-month increase in May, reflecting robust activity levels and confidence. Sales agreed in May showed positive growth, and the level of negotiation from the asking price to the sale agreed price remained steady at around 3%.

4. Mortgage Rates and Affordability:

Despite an increase in the Bank of England base rate, mortgage rates have remained steady. The average 5-year fixed rate with a 15% deposit is now 4.56%, significantly lower than the 5.89% recorded last October. This decrease in mortgage rates contributes to maintaining home mover confidence in the market outlook.

5. House Price Growth and Market Activity:

The Zoopla house price index reveals a year-on-year price growth of 1.9%, the lowest in recent times compared to the 9.6% recorded a year ago. Prices have fallen by an average of 1.3% in the last 6 months due to higher mortgage rates and rising living costs. However, buyer confidence has improved, resulting in an increase in sales agreed, primarily driven by falling mortgage rates during the Spring.

Regional Property Price Movements:

The West Midlands region has seen year-on-year price growth of 3.5%, surpassing the national average of 1.9%. Birmingham ranks second among major cities, with a growth rate of 3.8%, just behind Nottingham at 3.9%. These figures indicate a significant difference compared to last April when the year-on-year price increase approached 10%.

The Outlook for the Sales Market:

Market activity in the UK sales market remains comparable to pre-pandemic levels. However, predictions suggest that mortgage rates may increase in the second half of the year, impacting affordability and pricing. It is anticipated that the year-end may see approximately 20% fewer transactions than the previous year. Sensible and realistic pricing is crucial for sellers, while buyers should not be discouraged as long as the numbers align. As the year progresses, increased stock levels may provide negotiation opportunities.

Conclusion:

The UK sales market demonstrates resilience, with activity levels approaching pre-pandemic norms. Understanding market dynamics, considering pricing strategies, and staying updated on mortgage rate changes are vital for both buyers and sellers. Seek professional advice and remain adaptable to navigate the ever-evolving property market successfully.

Thank you for reading

How To Get Better Tenants

Who is your perfect tenant?

Let’s think about how we define our perfect tenant. It might differ from landlord to landlord and will depend on what’s important to you. You’ll also consider the type of property you own and the area you’re in – for example, is it a HMO? Are you located in a city centre full of professionals? Or is it an area popular with families?

The type of person you are able to target will determine how you categorise them, such as:

A family will require a home over a longer-term, where they can have security, and room to grow.
A young professional will be more likely to have an assured and stable income and will be prepared to pay for a good property with modern appliances.
A retired couple will have the benefit of a secured income and will be aware of their financial situation longer term. They will have experience in running a home and will be prepared to pay for what works for them.

Nice to meet you

The best way to get a feel for a prospective tenant is to actually meet them. As humans, we have an in-built ability to make hundreds of judgments based on seeing and talking to another human being, so what better way to get an idea of whether a person is right for your property?

This creates the opportunity to ask them questions about their situation, such as their reasons for moving, past rental situations, their jobs, and even their hobbies. It’s a great way to get a feel for who they are in a more natural and less formal way.

Don’t make promises at this stage, though. It’s perfectly ok for you to tell them that you’re not ready to make a decision yet and that you’ll be in touch, especially if you’re not getting a good vibe from them. You don’t have to take the first tenant you meet – in fact, you probably shouldn’t.

Check them out

Make sure that you do all the proper checks. Having a credit check, verifying their income, and immigration checks, will all determine whether they are the right tenant for you, and whether they can afford to pay their rent. However, be careful not to discriminate – letting things like race or colour, religion, or even benefit claims cloud your judgement is a big mistake, and as well as being unfair, is illegal.

Something else you might consider; using Google. Many people use social media, whether that’s Facebook, Twitter, or Instagram, and it’s surprising what you can find out about a person just by searching their name. It’s a useful tool if you want to make sure that the person applying to rent your property is right for you, as you can often get a good feel for their background, friends and opinions, which could all give you an indication of how they will be as a tenant.

Go with your gut

Above all, trust your instincts. If you want better tenants, it really is worth making the effort to meet them, talk to them, and don’t be afraid to do a bit of basic research into their background. Ask questions, and take the time to get a real feel for who they are. And be brave enough to admit if you don’t like them – there’s absolutely nothing wrong with admitting they are not a good fit for you, and looking for someone who is. So many landlords are in such a rush to get someone into their property that they just sign up the first person who takes an interest – and then have regrets when they create problems in not maintaining the property, or worse still causing damage or complaints.

Hopefully, this post has given you a little bit more confidence to go out there and seek out your perfect tenant. Making that little bit of extra effort can save you so much heartache in the long term.

5 Things to Consider When Choosing a Letting Agent

Choosing the right letting agent can be a difficult task. Many landlords dive in without giving it much thought. After being in the industry for as long as I have, I know how to separate average agents from the exceptional ones, and why would you settle for anything less than exceptional? The right letting agent will make you money and free you from the day-to-day tasks that stop you from doing what you’re good at.

Make sure you pick the agent that will give you everything you need.

When it comes to choosing a letting agent to invest your trust in, I’d like to share with you 5 key lessons I’ve learnt over the years. These are factors you should definitely consider to ensure you make the right choice.

1) Are they members of the ARLA?

Unfortunately, lettings is still an unregulated industry, which means it’s so important for you to ensure that the agent you choose is a part of either the Association of Residential Letting Agents (ARLA), or another regulatory body that ensures agents comply to a set of guidelines. You can learn more about these guidelines, and find a more extensive checklist of my guidelines for picking the perfect letting agent here.

2) Do they have Client Money Protection Insurance?

This is the minimum requirement you should be willing to accept, especially if the agent you’re considering is not a part of a regulatory body such as the ARLA. If your agent were to close down, and they didn’t belong to ‘SafeAgent’, you could risk losing both yours and your tenants’ money.

3) Are they both qualified and experienced?

This is your livelihood, and you wouldn’t place it in the hands of the wrong people. With the ever-changing legislation and the complications that come with the letting industry, your agent needs to know what they’re doing and be clued up on any changes. Make sure they have a management team too, because you want the right people to be looking after your business.

4) Do they have a dedicated management team or property manager?

The Property Ombudsman have stated that the majority of their complaints come from clients who are dissatisfied with the property management services they receive. Complaints regarding calls that haven’t been answered for example, highlight that sometimes there can be an issue with upkeeping a good service once it goes beyond making the sale.
The problem lies in whom the task of keeping the wheels moving is assigned to. Lettings negotiators for example are hung up on making their commission through sales, rather than keeping the clients happy. It’s not their fault either; where commission is a factor, naturally their attention is turned elsewhere. A dedicated team member for this service will ensure that all the admin is done - and done well.

5) Are they organised and trustworthy?

Again, this might sound like an obvious one, but if you want to make sure you’re paid on time, you’ll need to ensure your agent has a client account manager. If not, you could end up getting what you’re owed processed when the office is quiet, and not when you’re expecting it to be.

If you’d like to find out the final five important factors you need to consider when picking your letting agent, simply click here to download my checklist.