In his well-known book, Rich Dad Poor Dad, Robert Kiyosaki says, “What you know will make you rich. What you don’t know will keep you poor.” This is especially relevant to property investing where the landscape is ever-changing, but we know how hard it can be to keep up to date with everything.
So today, we’ve rounded up the property market highlights from the last month that we think you should know about. Keep reading to learn more.
We are on track to avoid a recession
It’s positive news for the economy, as the UK’s biggest high street bank, Lloyds, believes that we’re on track to avoid a recession. In its most recent forecast, it believes the economy will grow by 0.4% this year and by 0.5% in 2024, offering an improved outlook on previous predictions of 0.2% and 0.3%.
Rents are at an all-time high
An ongoing supply-demand imbalance continues to push rents higher with Zoopla latest data showing that over the last year, the average rent across the UK has increased by 10.3% to stand at an all-time high of £1,164 per month.
In Leeds and Sheffield, we are seeing fierce competition for high quality rental properties with many of our clients receiving multiple viewings and applications on their properties and tenants more than willing to pay an extra 10%+ every month to secure the property.
A study of 1,000 landlords found that three quarters of them have either increased rents during the past 12 months (40%) or are planning to do so in the near future (35%). This means rents will continue to skyrocket, which is great news for landlords but not such great news for renters!
Lack of buyers means there is an opportunity to grab a bargain
Hometrack has reported that 4/5 housing markets across the UK have seen annual house price falls and Savills expect this general downward trend to continue to trickle into 2024.
That, partnered with buyer demand, now a fifth lower than this time last year, means sellers are struggling to find buyers for their properties at a price they are happy with.
This is welcome news and a great opportunity for those looking to start investing in property, as there are currently some great discounts to be had.
Interest rates held at 5.25%
The Bank of England (BoE) has announced it will hold the Base Rate at 5.25% again this month. This follows the same decision in September, when the Base Rate was held for the first time since 2021, after 14 consecutive rises. This is promising news as it shows the Bank’s belief that its plan to tackle high inflation is working and is a good indicator that the base rate has reached its peak.
Mortgage rates are falling
Average fixed mortgage rates have now fallen for 11 consecutive weeks, with the average two-year fixed rate now below 6% for the first time since June, and the average five-year fixed rate dropping from 6.08% 11 weeks ago to the current 5.43%.
With swap rates – which dictate the underlying costs of mortgages for lenders – continuing to fall, RightMove expects to see some mortgage lenders getting even more competitive with their pricing in the coming weeks and reducing their rates even further.
Summary
With rents increasing further, house prices falling, and the economy no longer set for recession, it’s positive news for investors looking to invest in the UK property market.
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