Property prices falling, rental prices increasing, FTBs save money for deposit

Hello reader!

We’re back with our final newsletter for the month.

But before we go into all that, there’s something we need to address. Some of you reached out to us to share your feedback on our newsletter, and how you look forward to our newsletter every other week.

We'd like to thank you for putting a roof over our efforts to bring you easy, digestible housing market information.

It encourages us to keep going.

PS: We wrote another blog last week. Show some love, and check it out: How To Maximise Profits On Rental Property 2023 (hint: not what you think ??).

Market updates

• As buyers rethink their options for affordable housing, mortgage rate hikes could trigger a 2-year housing downturn.The Office for Budget Responsibility (OBR), in their forecast, says that we can expect house prices to fall by 9%.
• House prices across the UK experienced the biggest monthly fall since early 2021. Halifax says that the average property fell by 0.4% in October, the third consecutive monthly drop in the past four months.

Halifax also noted that the average UK house price in October was ￡292,598, the lowest since the month of May.

• The 2022 Autumn Statement has caused a tax crackdown. On one hand, home buyers will pay less on stamp duty. On the other hand, second-home owners selling up after April 2024 will see their (capital gain) tax bills inflated by a couple of thousand of pounds. This could lead to a rush from landlords trying to thwart the tax change, thus further destabilising the housing market.?
• We know that rents have been increasing all around the UK. In fact, rent prices are increasing at the fastest rates ever. A chronic property shortage in the rental sector has fuelled this, comments The Telegraph. The cost of living crisis does not seem to ease, and this only makes things harder for tenants. ??
• On top of that, most renters are also responsible for the council tax bill on their rentals. Here are some figures for council tax as a percentage of the rent by regions that evoke mixed emotions in us.

England(National Average): 17.7%

North East Region (most severe): 30.3%

North West Region: 25.3%

Yorkshire & the Humber: 25.1%

West Midlands: 22.6%

South West: 19%

The hardest hit renters are from Hartlepool, County Durham and Burnley, Lancashire, as they have to pay 37.5% of their rent as the council tax bill.

Source and more data: PropertyNotify

• Chesterton’s latest statistics show that the rental market in the capital might be stabilising. This year, there are 35% more rental properties in London than last year. They suggest that this might encourage more tenants to re-enter London’s rental market.

Some context on why we think this a good development: The headline on our second newsletter for October read ‘Londoners to find rentals elsewhere while housing price growth eases!’

So yes, this is great news for London, as it can get people it lost or retain ones who wanted to leave.

• To complement this news, Rightmove’s latest numbers also show a 20% increase in demand for London rentals on their portal.

Can London meet the increasing demand with more rental properties now on the market? Keep following our newsletter and we will update you ??

• SpareRoom offers a different story though: nearly nine people searching for accommodation for every one room advertised online. It seems that room availability continues on a declining trend since (at least) 2020 (see Figure).

• First-time buyers (FTBs) are cutting down on their expenditures in a bid to save more for a deposit. According to a survey by Rightmove:

- 72% are counting on fewer outings

- 55% of them are spending controlling gas and electricity usage

- 49% opt to reduce holiday expenditure

- 48% of them are even cutting down on food ??

- 35% of them decide that they could manage without Netflix and Amazon Prime

The sad part is that despite cutting down expenses, mortgage rate hikes still pose a challenge.

If that wasn’t enough, “hold my beer”, says inflation, as an average saver will lose ￡2,000 due to inflation this year. Telegraph reports that this year’s inflation is higher than interest rates, whose trend we’re still unsure of. Read: How High Will Interest Rates Go?

?? 'Hood in the spotlight: Oxford North

Green light for the ￡700m megaproject

Oxford's new venture to become “unique home and workplace for scientists, technologists and inventors”

Oxford to build an “Innovation District”, a unique home and workplace for inventors, scientists and technologists. So good, as this promotes science and innovation, putting a roof over the ones who want to understand and make this world better.

The project was given the green light in March last year and will be built on a 64-acre plot within Oxford’s northern border, with a budget of ￡700 million.

Here’s the best part: the developers are asking for people’s input as a consultation plan to make this worthwhile and inclusive.

They are hosting two events: both drop-in and online.

You’d think we’ll let you fetch more details. But we made it easier by finding the link, haha, because that’s what we want to do, promote better infrastructure to you and everyone else. So go ahead, read more.

We hope you enjoyed this newsletter. See you again in December.

Until then,

Ciao from us Adjoiners ??

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