Your monthly property update

Our October UK rental market update for you

 

According to Zoopla, the average rent has risen by £115 per month since September last year, to £1,051 a month in September 2022.

 

The rise is substantially outpacing earnings growth across the country and boils down to a catastrophic imbalance between supply and demand.

 

The lack of supply has led to dwindling options on the market for renters, as rental stock levels sit at around half the number seen on the market in the past five years.

 

Many renters will find themselves in good financial stead, by choosing to stay put in their current rental homes to avoid future rent increases and growing competition elsewhere on the market.

 

Renters return to the city

Growing employment rates in the wake of the pandemic, and a growth in high-quality, purpose-built build-to-rent homes appearing around the UK, is drawing more renters into urban areas.

 

The appeal towards energy efficient new-build homes is proving to be a big pull towards renting in the city, as most new developments tend to be around city centres, and renters will seek out a low EPC rating to stay on top of energy bills.

 

Rents for tenants remaining in current homes rising at a much slower pace

The average renter will move every four years, according to Zoopla, so their data reflects rent prices on new lets for around 25% of the market.

 

However, the Office for National Statistics’ (ONS) rental index outlines rental increases across the board, for both movers and non-movers.

 

The data shows current rents across all rented homes have seen a 3.7% increase, compared to the average recorded in July 2021.

 

Those moving to a new rental property will find the cost of renting 12.3% higher, as rents for new lets are correlating to the decline of supply amid high demand across the country.

 

How much higher can rents go?

While rental affordability varies according to location and income, in the latest English Housing Survey from 2020 to 2021, three quarters of private renters agreed they found rental payments very or fairly easy to meet. The remaining 25% found them fairly or very difficult to pay.

 

The question of how much higher can rents go, will depend on how much headroom renters have, to pay more rent.

 

While competition and demand continue to skyrocket, landlords have no reason to believe there isn’t opportunities for above-average growth in the less expensive areas of the UK.

 

What to expect in the rest of 2022, going into 2023

There are no signs of significantly improved rental supply in the near term, as private landlords continue to sell off homes, and renters remain for longer terms.

 

The imbalance between supply and demand will also remain unwavering, and rents will continue to grow at above-average levels well into 2023.

 

There are clear signs of headroom for some renters to pay more. Especially in areas of the country where rent is already high.

 

There may be a cool-down period emerging further into 2023, but this will come at a slow pace.

 

As well as avoiding rising rental prices, tenants will look to find smaller rental properties to keep their energy bills low. However, the horizons for options on the market should broaden, as the economy begins to recover.

 

The climate of the rental market can only benefit from more homes appearing on the market, which will help to close the gap between supply and demand.

 

Do you have a property to let? Find out how we can help you manage your portfolio, by visiting our website today.

 

 

What to consider when moving house before Christmas

 

Moving home can often be a stressful process for sellers, but there are plenty of ways to make things run as smooth as possible. Timing sits somewhere at the top of the list, as the property market changes on a monthly basis, and demand fluctuate with it.

 

Get the property ready for marketing

Once you have decided to market your existing property, you will need to make sure it is photo-ready and looking its best for potential buyers.

 

Those looking to move in time for Christmas will want to be able to envision cosying up around the fireplace or sitting at the dinner table with family. So, make sure you can present your home to buyers as a fresh canvas by decluttering, deep cleaning and making the place feel brand new.

 

Choose the right selling agent for you

If you want to achieve the best price for your property, you need to find the best agent to sell it. Make sure you take extra care when making your final decision on the right agent and take the time to get to know them. A good estate agent will do the difficult work for you and take care of any nitty gritty complications which could slow you down. They will also accurately value your home and advertise it effectively and efficiently.

 

Arrange a valuation on your property early

Get this done as soon as the possibility of a future move crosses your mind, as it will allow you time to make any upgrades or adjustments to your property. It will also save you time later when you’re ready to sell, and will give you a good idea early about the scope of your budget for your new home.

 

Set the right asking price

Setting the wrong price - whether too high or too low - means you could miss out on suitable buyers willing to make fair and sensible offers. The best way to speed up your selling process is to set the right asking price for what your home offers, so you can reach as many potential buyers as possible and have a number of fitting applicants to choose from.

 

Book surveyors as soon as possible

Once you’ve found the right property for you, it’s advisable to ensure that you get a decent survey before you fully commit to the new home. This way you can avoid any unpleasant (and costly) surprises after you move in. A surveyor will be able to spot any issues with the property - so you won’t have to later.

 

Don’t forget the final details

In the excitement of a move, it’s easy to forget the small details. Ensure you tie up any loose ends such as informing utility companies that you’re moving, and having your mail forwarded to your new address – just in time for Christmas cards!

 

Have you considered selling with us? Visit our website to find out what we offer.

 

 

Should I consider remortgaging now?

 

As of September, mortgage rates rose for the 11th consecutive month, while options for buyers on the market declined as the industry continues to adjust to higher interest rates.

 

The average cost of a two-year fixed rate mortgage reached a high of 4.5% in September, an increase of 1.9% since December last year.

According to Moneyfacts, the typical cost of a five-year fixed rate mortgage also rose to 4.33%, an increase of 1.69% since December, and the highest level since November 2012.

 

Meanwhile, lenders have withdrawn over 500 mortgage products during the past month, leaving 3,890 different deals for borrowers to choose from. This is the lowest level since April 2021 and it’s a fall from more than 5,300 deals at the beginning of December.

 

The number of different mortgages available dropped for all types of borrowers, from first-time-buyers, to those with large equity stakes in their property.

 

As for good news, the average amount of time a mortgage is available for before lenders withdraw it is increasing from a record low of 17 days back in August, to 28 days in September.

 

What are the causes?

Growing inflation has a domino effect, from an increase in the Bank of England’s base rate to higher mortgage rates.

 

The Bank’s Monetary Policy Committee has hiked the base rate by 1.65% since December last year, in an effort to control inflation.

 

The increases make it more expensive for lenders to borrow money on the money markers, which leads to the higher mortgage rates for customers.

 

Is it still a good idea to remortgage?

Despite the increase in mortgage rates seen since December last year, it is still definitely worth remortgaging if you are coming to the end of your current deal.

 

The average standard variable rate, which is the rate that lenders put you on if you don’t remortgage, has reached 5.4%, the highest level since December 2008.

 

This rate has seen a continuous growth for nine consecutive months, rising by 0.23% in August, the largest monthly jump ever recorded by Moneyfacts, which started keeping records in December 2007.

 

The rising rate isn’t expected to slow down any time soon, as standard variable rates typically move up and down in line with changes to the base rate.

 

Although interest on the average two-year fixed rate mortgage has now reached 4.24%, homeowners with a £200,000 mortgage could still save £136 a month by choosing to remortgage, rather than sitting on their lender’s standard variable rate. This is without even factoring in future interest rate rises.

 

The advantages of remortgaging

The main benefit to remortgaging is being able to save money by switching to a cheaper deal.

 

When your fixed, tracker or discounted mortgage deal ends, you will no longer benefit from a preferential rate. Instead, you will automatically move onto your lender’s standard variable rate, and your payments are likely to jump.

 

Another advantage of remortgaging is that you can ask to borrow more money to carry out home improvements, which will secure a healthy investment in the long run.

 

You can also lower or increase your mortgage term when you remortgage if you meet the bank’s eligibility criteria, which will further lower your monthly spends.

 

If you’ve been considering making your next property move and are looking for advice, get in touch with us today.

 

 

Understanding estate agency fees

 

If you’re thinking about selling your property, it’s always best to do so with the help of an estate agent, and this will require paying a fee from the percentage of your sale. To help you understand the cost of estate agency services and how they fit with the overall cost of selling, we’ve pulled together a guide on estate agency fees.

 

How much are estate agent fees?

 

The current average estate agent fee in the UK is 1.42% of the final selling price, which includes VAT. For example, if your property sold for £275,000 then your estate agent fee would be 1.42% of the final sum, which is £3,900. *

 

However, this average figure only applies if you enter into a sole agency agreement. If you choose more than one estate agent, the fee would typically be higher – 3% higher, to be exact. It’s important to take this added cost into account before entering into a multi-agency agreement.

 

What do estate agent fees usually include?

 

It’s important to ask what will be included in the fees, as services can vary by agent. In general, you should expect that your agent will provide the following:

• Valuation of your property based on expertise and extensive research.
• Drawing up floor plans.
• Accumulating interest from their own list of appropriate buyers.
• Marketing on property portals (such as Zoopla and Rightmove) and other traditional advertisement outlets.
• Organising viewings.
• Negotiating a suitable sales price.
• Professional photographs of your home.
• Installing a For Sale sign.
• An enticing written description of your property.

 

When do you pay estate agent fees?

 

In the event that the estate agent is unable to sell your property, you will not be charged. Most high-street estate agents work on what is known as a ‘no sale, no fee’ basis when selling properties. Therefore, you should only pay the estate agent the fee once the property has been sold and contracts have been exchanged.

 

Should I choose the cheapest estate agent?

 

Selling a property means placing your most valuable asset in someone else’s hands. Therefore, you want to feel confident that you have hired the best possible people for the job.

 

If an estate agent is offering to sell your property for a suspiciously low commission fee, this is a clear red flag and the reasoning behind the small fee will soon become clear. The best agents will most likely charge higher fees as the value is reflected in the quality and efficiency of the service.

 

Moreover, paying a higher fee for a reputable agent will benefit you more in the long run, as they may be able to sell your property for a higher amount than a cheaper estate agent. In this case, while you may be paying a higher commission, the amount of money gained from your home’s achieved price could be higher than that of a cheaper estate agent who would have sold the property for a lower amount.

 

There’s no guarantee that the most expensive agent on the market will be the best one, which is why thorough research is so important before choosing an agent that is right for you. Take your time reviewing your options, always check online reviews, and make sure any agent you consider has your best interests at heart.

 

Have you been looking for an agent? Get in touch to discuss selling your property today.

 

 

*Home Owners Alliance

 

Halloween at Leeds Castle

From 23rd to 31st October, you are invited to come and explore the grounds, as Bones has left different clues and riddles for you to solve which will lead you to his secret whereabouts.

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Halloween Half Term Fun at the Farm!

Treat the kids to a spook-tastic feast of fun for the half term holidays! Dress up in your best Halloween fancy dress (optional!) and come and join in! Children's rides, animal farm and more tricks and treats!

Click here to read Halloween Half Term Fun at the Farm!.