0:02 AM, 13th June 2024, About 5 months ago 5
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Confidence in the UK’s housing market is beginning to fall in the run-up to the General Election with one index highlighting the issues with ‘a huge mismatch’ in the private rented sector (PRS).
The survey by RICS shows that tenant demand continues to outstrip supply, leaving them facing rising living costs and plummeting affordability levels.
Its research shows that demand is rising – it is up 35%, which is a big hike from May’s +10%.
Meanwhile, new landlord instructions are now ‘flat’ so rents will continue to rise for the foreseeable future, though at a slower pace.
The organisation’s chief executive, Justin Young, said: “Despite an improving overall outlook, today’s data reveals that confidence in the housing market is beginning to dip – just as parties launch their manifestos.
“While both the Conservatives and Labour have staked their claims as being the party of home ownership, for that to be the case, greater attention must be paid to improving conditions for Generation Rent, who are faced with rising rents and a lack of suitable options.
“This particular demographic – typically made up of people aged between 18 and 40 – has doubled in the last two decades, so politicians need to focus on them, as well as homeowners, as a means of gaining the support of a growing portion of the electorate.”
He added: “The housing market needs policies that think longer term, not short, and awareness that the different tenures are interlinked, so there is no one solution that will fix the situation.
“With the market under strain, the supply and demand gap in both lettings and buy side continues to create issues.”
He went on to say that first-time buyers are being hampered by higher interest rates with political parties looking for support with various promises.
The Conservatives are offering Help to Buy, while Labour is promising Freedom to Buy.
Mr Young added: “Many millions of voters are feeling both cost of living, and market impacts; the political parties see this and are trying to entice the electorate with proposals in their manifestos.”
RICS also says that hopes for an interest rate cut are also fading and there has been a drop of 8% in new buyers.
That’s the lowest figure seen since last November.
The index reveals that buyer demand is weakest in the South East and South West of England.
RICS is also reporting a fall in the number of sales agreed last month but is predicting that sales will rise modestly over the next three months.
It also offers an upbeat outlook for the next year with 43% of those surveyed predicting an uplift in sales activity – up from 33% in April.
House prices are also falling nationally with a slight drop in May.
However, house prices in Scotland and Northern Ireland continue to rise.
Beaver
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Sign Up10:03 AM, 13th June 2024, About 5 months ago
RICS is a generally well respected institution and you would have thought that governments around the UK would take account of what they say.
Demand is up 35% and new landlord instructions are flat. But the policy of all the main parties penalises small-portfolio landlords.
I wonder if there's a party out there that is able to join the dots?
Downsize Government
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Sign Up10:37 AM, 13th June 2024, About 5 months ago
Reply to the comment left by Beaver at 13/06/2024 - 10:03
Yes Reform.
Check out their manifesto.
moneymanager
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Sign Up11:38 AM, 13th June 2024, About 5 months ago
One factor affecting sales is the continuing disgrace of EWS1 issues, even with fully funded projects the difficulties are enormous and multiple property owners can't get the freeholder's certificate they need, this impacts far more than just would be buyers and sellers but divorces, inheritances, and a myriad other scenarios.
Ian Narbeth
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Sign Up11:59 AM, 13th June 2024, About 5 months ago
Reply to the comment left by moneymanager at 13/06/2024 - 11:38
The Building Safety Act is going to make the problem of conveyancing of flats worse over time. Much worse. A major problem is the "strike date" of 14 February 2022. The status of the owners and their wealth at that date is critical. As time goes by and properties transfer on death or at auction or with incomplete information, it will become hard if not impossible for solicitors to advise buyers and sellers with certainty as to liability because the facts will be unknown or unknowable.
The legislation was rushed through in response to Grenfell and problems of defective cladding. It created the appalling precedent that civil liability for something a person had not done and perhaps had little control over, depending on how wealthy they were and not on the usual principles of negligence. To borrow a legal saying, hard cases make bad law.
NewYorkie
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Sign Up18:18 PM, 13th June 2024, About 5 months ago
Reply to the comment left by moneymanager at 13/06/2024 - 11:38
The combination of EWS1 issues and ground rent issues [leasehold] means the market for flats is pretty much dead. Millions want/need to move, but are hampered by freeholders who make their lives a misery, and lenders who refuse to do their job, and lend. This means those in properties the next tier up face difficulties in finding buyers, and so it continues until lower level affordability isn't such an issue.
The Tories had the perfect opportunity to fix the ground rent issue and caved to their mates in the freehold lobby. Will Labour make it happen? I doubt it... because they believe they will comfortably win the election without the need for the leaseholder vote. Once in #10, leasehold will become a back-burner issue, and the housing market for flats will continue to stagnate.