Weekly Property News
Gregg Williams
Turn-key Specialist ?? | Property Trader ?? | Property Investor ?????????????? | Property Lettings ?????? | Refurb Management ??
OnTheMarket warns mortgage repricing will hit homebuyer and seller confidence.
Homebuyers should prepare for short-term volatility as mortgage rates are currently being repriced, OnTheMarket chief executive Jason Tebb has warned. Tebb warned higher swap rates on the financial markets are now pushing mortgage pricing up again, which he said may impact buyer and seller confidence in the housing market over the short-term. It comes as OnTheMarket’s latest sentiment index for February found the overall number of vendors confident about selling within six and nine months declined by one percentage point to 28%, while those confident about selling within 12 months remains unchanged month-on-month at 6%.
Meanwhile, 62% of sellers were confident they’d sell their property within the next three months in February, an increase from January’s 60%. The data also shows that despite rising interest rates and the cost-of-living crisis, buyer sentiment remained steady, with 69% confident they’d buy within three months, the same percentage as in January.?A fifth were also confident about selling over the next 12 months, the same figure as in January.
Tebb said: “There are still challenges ahead, particularly regarding inflation, but concerns seem to be short-term rather than medium to long-term.
“The Prime Minister has pledged decisive action to halve inflation by the end of the year, and while it’s some way off its 2% target, it’s moving in the right direction. Interest rates may have a little higher to go but there are growing expectations that they’re close to their peak.
“Borrowers may need to brace themselves for further short-term volatility in pricing as fixed-rate mortgages, which soared in the autumn before edging downwards earlier this year on the back of falling swap rates, are now being repriced upwards again.?
“Such volatility is bound to impact buyer and seller confidence, creating short-term pressures for borrowers with high loan-to-value mortgages in particular.?
“Despite ongoing concerns about the cost of living and rising rates, many people still need to move, but as buying power is reduced, sellers must be more realistic.”
Tebb said the current environment makes it more important to speak to an experienced agent who understands local market conditions to get an accurate market appraisal.
He added: “Although we split our data into buyers and sellers, many sellers are also buyers, so even if they have to sell slightly off the top of the market, assuming they’re moving up the ladder they’ll also spend relatively less on their next property as the trading gap narrows. If ever there was a strong argument for moving, that surely is it.”
?Biggest buy-to-let maintenance headaches uncovered.
Dealing with infestations represents the most common maintenance task facing landlords, while roofing repairs will cost them the most on their investment, new research has revealed.
The analysis by Benham and Reeves has shown that on average, a landlord will be required to carry out repair or maintenance work on a buy-to-let property 72 times during their ownership, costing them over ￡34,000.
The research also found that the average landlord will own a buy-to-let property for an average of 109.2 months, or just over nine years. During this time, the 12 most common maintenance issues alone will see them carry out an average of 72 repairs on the property, costing them ￡34,314 in the process.
The costliest of the lot is repairs made to the roof, and while it is only likely to be required six times during the span of their ownership, the total cost of these repairs comes in at ￡3,494.
While a landlord is likely to replace or repair white goods just five times during the time they own a buy-to-let property – the lowest frequency of all repair tasks analysed – they rank as the second largest overall maintenance cost at ￡3,231.
Keeping the property in a fresh lick of paint may also be required just five times during ownership, but also ranks as the third largest total cost, at ￡2,992 on average.
However, when it comes to the most persistent problems facing the nation’s landlords, it’s household pests that rank top. Benham and Reeves estimate that during the average time of buy-to-let ownership, a landlord will have to address the issue of pest control as many as eight times, costing them a total of ￡2,940 in the process – the fourth highest total cost.
Mould or damp is also one the biggest bugbears, and while it ranks as one of the less expensive repairs to make at ￡2,752 in total, the average landlord will need to carry out mould maintenance an average of seven times during their ownership of the property.
Marc von Grundherr, director of Benham and Reeves, commented: “The long-term cost of being a landlord cannot be ignored. Anyone who is thinking of investing in buy-to-let property needs to first be aware of how ongoing outgoings will affect the overall profitability of their investment.
“However, ensuring that you’re always on top of maintenance issues is much more affordable than letting them get out of control, not least because a high-quality property reduces tenant turnover and, therefore, void periods.”
Rightmove: Top-end sellers may need to alter price expectations.
Some sellers remain optimistic about their price expectations as sales at the top end of the market begin to lag, Rightmove has warned.
It comes as the latest Rightmove House Price Index showed the average price of all types of property coming to the market has risen by 0.8% since February to ￡365,357.?
This is below the average monthly rise of 1% seen in March over the past 20 years, which the portal said reflects a higher degree of pricing caution by many new sellers.
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However, the exception to this caution is a 1.2% monthly price jump in the larger home top-of-the-ladder sector.
This is in contrast to more modest 0.4% and 0.5% respective rises in the second stepper and first-time buyer sectors respectively. Overall, new seller asking prices are now ￡5,800 below October 2022’s peak, with annual price growth continuing to ease and now at 3.0%, down from 3.9% in February.
The larger rise in asking prices at the top of the property ladder comes despite sales agreed for these types of homes in the past two weeks now 10% behind the same period in 2019 and 13% behind in the second-stepper sector, Rightmove said.
Sales agreed for typical first-time buyer properties are just 4% behind the same period in the more normal market of 2019. However, they are 18% behind last year’s exceptional level.
The portal’s analysis suggested the 1.2% rise in the most expensive property sector “appears to be over-optimistic given the slower recovery in sales agreed numbers.”
Rightmove added: “Some sellers in this sector may need to temper their price expectations in order to attract more buyer interest and secure a sale.?
“One contributing factor to larger home sales lagging is a reduction in pandemic-driven lifestyle changes. The proportion of buyers enquiring to make a move over 50km away from where they live is now 15%, the same level as 2019 and below its pandemic peak of 18%.”
Tim Bannister Rightmove’s director of property science added: “Lagging sales agreed in the larger homes sectors are likely to be caused by a combination of factors including fewer pandemic-driven moves to bigger homes, a more cautious approach to trading up due to the cost of living, and even perhaps concern over the running costs of a larger home.?
“Meanwhile sales in the first-time buyer sector are likely being helped by some deposit assistance from family.?
“The differing performance of smaller and larger homes highlights the multi-speed, hyper-local market. Sellers looking to take advantage of traditionally strong buyer interest during the spring moving season should seek the expertise of a local estate agent, who will have their finger on the pulse and be best placed to advise on their local market.”
?HMRC rakes in the cash - is Inheritance Tax hurting property?
A business consultancy is reporting a rise in stamp duty paid by landlords and other home buyers - but is warning that inheritance tax is beginning to be a factor in the housing market.?
Hargreaves Lansdown says overall stamp duty receipts for April 2022 to February 2023 are ￡18 billion - this is ￡1.1 billion higher than in the same period a year earlier.?
But it warns that after a strong start to the year, receipts are starting to fall as the housing market slows and stamp duty changes come into effect.
Meanwhile inheritance tax receipts for April 2022 to February 2023 are ￡6.4 billion - this is ￡0.9 billion higher than in the same period a year earlier and reflective of a long-term freeze in thresholds.
Hargreaves Lansdown analyst Helen Morrissey says:?“Stamp duty receipts started the tax year strongly but have quickly run out of steam as the property market slows dramatically. The cost-of-living crisis has hit our budgets hard and means more people are having to shelve the prospect of buying a new home for the time being.?
“These receipts are up to February and likely relate to sales agreed late last year as the market was starting to unwind the chaos caused by the mini budget. Added to this, changes to stamp duty will have also had a dampening effect on receipts.?
“We’ve seen mortgage rates come down since then, but they remain higher than many people are used to, and this will likely put them off dipping a toe in the market for now.”
Morrissey continues: “Tax freezes also continue to bite with inheritance tax receipts also higher than this time last year. Thresholds have been held for several years and the rise in asset values, particularly property, that we’ve seen in recent years mean more and more families are being drawn in.?
“Far from being a rich person’s tax IHT is becoming an increasing problem for middle-England, particularly for those in the South of England where property prices tend to be higher. If you can plan for it, then that makes life easier but for those who don’t it can come as a nasty shock at a difficult time.”
The consultancy says that latest Income Tax and?National Insurance receipts?are ￡38.1 billion higher than in the same period a year earlier.?