Latest: November’s property market report
It was all change across the UK in October, starting in England. It was only a month ago that we wrote about a new Prime Minister and Chancellor at the helm. Unbelievably, we are reporting the very same news a matter of weeks later, swapping Liz Truss for Rishi Sunak and Kwasi Kwarteng for Jeremy Hunt.
So, what does the change in guard mean for property in England? The new Chancellor has retained his predecessor’s stamp duty revision, while reversing many other aspects of September’s mini Budget. Buyers continue to enjoy a cheaper stamp duty bill – contact us and we’ll calculate how much you’ll pay on any property for sale.
Changes to Welsh Land Transaction Tax
October also saw stamp duty news in Wales. The rate of Land Transaction Tax (LTT) that Welsh buyers pay changed on 10th October. The threshold at which LTT applies has risen from £180,000 to £225,000, with no tax to pay for an estimated 61% of buyers. People purchasing a property in Wales between £225,000 and £345,000 will see a tax bill reduction of up to £1,575. Welsh buyers purchasing for more than £345,000 will, however, see an LTT bill increase of up to £550.
Temporary bans in Scotland introduced
In Scotland, a set of temporary property changes are making the headlines. The Scottish Government passed a bill in October that included a rent freeze until the end of March 2023. A six-month long ban on evictions has also been introduced. The measures are a direct response to the cost of living crisis.
How much property will sell for in the future is a hot topic across the UK and house price indexes continue to provide a snapshot of the market. Nationwide’s latest report, which reflects activity in October, revealed prices are beginning to adjust. After staying static in September 2022, the building society recorded a -0.9% monthly house price fall in October.
This is the first time prices have dropped since July 2021, leaving October’s UK average house price at £268,282. The rebalancing has also affected annual house price growth. This is down from 9.5% in September to 7.2% in October.
While cooling conditions are being noted in the sales market, the same can’t be said in lettings. HomeLet’s Rental Index for October 2022 showed we’re still in the grip of exceptional rental conditions. Its data found every region in the UK continued to see annual rental price growth.
October brought with it more month-on-month rent rises. HomeLet says the average rental price for a new tenancy in the UK rose 1% in October. The new average ‘per calendar month’ rent is £1,171.
Year-on-year rental demand continues to rise
It’s a figure mirrored almost exactly by Rightmove. When analysing rental trends in October, the portal found the average monthly rent in Great Britain is now £1,162. It added that demand from renters is up 20% in October 2022, when compared to the same period in 2021.
Whether you’re hoping to buy as an owner-occupier or as a property investor, we know mortgage rates are on your watch list. Zoopla has offered a glimmer of hope for those tracking costs. The portal’s October forecast claims rates will start to drop as money markets recover from recent instability.
The new normal in the mortgage market
It says a change for the better could come as quickly as the end of 2022 but mortgage rates are expected to fall to 4-5% next year – down from current 6% highs. Zoopla adds lower rates will ease the need for sellers to reduce their asking prices to secure a sale.
The portal’s forecast does come with caveats. It says the days of ultra-low lending are over. It also adds that mortgage rates of around 5% will become the new norm. This figure should, however, be tempered by any action the Bank of England takes regarding raising the interest rate.
If you would like to know more about your local property market, please get in touch.
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