More renters are looking to move cities in search of value (and low rent)

Hey there,

We bring you the final newsletter for March.

A lot has been happening in the market in the past weeks. Especially the Summer Budget 2023. In this newsletter, we talk about what it means to the housing market and many many more.

PS: The Bank of England announced new bank rates today. And it's not good news for borrowers as B.o.E. increased the rates to 4.25%, in what is the 11th consecutive rate hike. This was expected, given the recent spike in inflation to over 10%. And it will definitely have an impact on mortgage rates.

Right, let’s go!

Housing Market Updates

• The Spring Budget 2023 was unveiled on the 15th of March. Following the announcement, the Office for Budget Responsibility (OBR) has released its latest forecast?‘Economic and Fiscal outlook’.
• The predictions for the housing market? Not so optimistic… See for yourself:

?? By Q3 2023,?house prices?to drop 10% from their high in Q4 2022.

?? House prices to start rising again in 2026.

?? Property transactions to drop by 20%.

• Savills – a leading estate agent in the UK –?expects?new build sales?to drop by 55,000 per year: from 145,000 currently to 90,000.
• Developers are having a tough time because fewer people want to buy new houses, coupled with increasing difficulties in getting permission to build them. As a result, the number of sites gaining consent to build new houses has gone down by almost 30% in the last five years.
• While there are many reasons behind the decline in property sales, one, in particular, has turned sellers off –?low offers!
• In the last month, 35% of people who were trying to sell their homes took them off the market without finding a buyer. This is an increase from 24% in the same period last year.
• The proportion of properties withdrawn from the market was at its highest in January 2021 (38%), and it remains higher than the rates observed last year.
• For sure, financial restrictions have limited how far a buyer will be able to stretch to purchase a house. But a good question to ask is if sellers are?overpricing?their homes.

Richard Donnell , of Zoopla,?said:

“Homeowners that want to sell their home this year need to price realistically.”

• Zoopla also notes that?sellers have already slashed asking prices?as affordability is declining rapidly. The share of homes that sold 5% or more below the asking price has soared to a 3-year high – that’s a 45% increase since the start of January.

• However, if you are thinking that you are better off renting than buying a house, then you are off by ￡500 a year. According to Halifax, a first-time buyer of a 3-bed home would have to pay ￡971 as mortgage every month.
• A renter, on the other hand, would have to pay ￡1,013 per month to live in the same property. That’s a?saving of over ￡500 per year?if you choose to buy instead of renting.

But buying is not the same as renting. Buyers have to pay a higher initial deposit, whereas renters pay way less.

• Sure, buyers would save ￡500 per year, but do all renters have enough money to close the deal? Unless of course the?bank of mum and dad?has got their back because 3 out 5 first-time buyers are expected to receive help from parents this year.
• If at all, this statistic only highlights the disadvantage of the average renter in the UK, who will be paying more every month with no ownership. This is exactly why we created Adjoin Homes – so that renters can build housing wealth too.?Read our story?on ekathimerini.com which features? Konstantinos (Kostas) E. Zachariadis , our CEO.
• Talking about renters:?Rightmove’s latest research?says that 42% of?renters are looking to move cities. This is a 5% increase compared to last year’s numbers.
• To no surprise, London has seen the biggest increase among all locations, as the proportion of renters who are considering moving out of the city has risen from 31% in 2022 to 38% currently. Rightmove attributes this exodus to sky-high urban rent and the rapid decline of available housing in cities.
• Some?renters are facing bigger problems?in the name of?eviction?and rent debt. The number of eviction cases involving tenants renting from private landlords lodged in Scotland has doubled since September, with 224 cases currently pending.
• Before the rent freeze and eviction ban by Nicola Sturgeon in September, there were typically 100 eviction notices per month.
• Social landlords also have almost the same number of cases.
• The average rent debt is believed to be over ￡4,000. Time has indeed been cruel to the average renter in the UK.

??'Hood in the spotlight: Central Quay, Cardiff

One of Central Quay's New Apartment Projects

Construction has begun for a new apartment scheme overlooking the River Taff in the centre of Cardiff.

Backed by L&G – a giant in the financial services sector – this ￡250m development will be erected at the Central Quay, home to the site of the former Brains Brewery.

L&G acquired the land worth around ￡20m at Central Quay from Rightacres last year. This will be the biggest ever build-to-rent (BTR) development in all of Wales.

Here’s what the apartment scheme will have:

• 715 BTR apartments
• 2 separate apartment buildings with their concierge
• Lobby
• Gym
• Gardens
• Terraces
• A public square facing the River Taff
• 19,500 sq ft of leisure and retail space.

The BTR project's first section is expected to be completed by May 2026, while the second phase is scheduled for completion in March 2027.

Read more about the project?here.

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