House prices in the UK fell by an average of 5.3% over the last year, according to the latest data from Nationwide. This represents a drop of £14,600 in the price of the average house, the sharpest fall since 2009, Property Industry Eye reports.
Meanwhile, the Financial Times (FT) reports that tenants in London have faced a rise of 5.5% in the year up to July, which is the steepest jump since January 2006. Throughout the rest of the country, there was a slightly smaller rise of 5.3%. Higher mortgage interest rates are thought to be the driving factor in both falling house prices and rising rents.
Nathan Emerson, chief executive of Propertymark, a trade body for estate agents, told the FT that the price pressures on rents were exacerbated by a shortage of rental housing stock.
He commented: “There is a huge disparity in the number of properties available to rent compared to the continuously growing number of renters looking for a home, ultimately continuing to put pressure on rent prices,” he said as he urged the government to “urgently address the problem”.
People who are currently renting and trying to save up for a deposit for their first home may be cheered by the news that house prices are predicted to fall even further by the end of the year.
Gabriella Dickens, an economist at Pantheon Macroeconomics, told the FT that she expected to see a further 8% fall in house prices by December, as buyers remained cautious amid higher mortgage rates and the rising cost of living. Although inflation is falling and wages are rising, the effects of this are not expected to be felt until at least 2024.
For those who can afford to step onto the property ladder, now may be a good time to consider it. Despite the higher mortgage rates, it can still be a cheaper option than renting, especially in areas such as London where the rental market is becoming increasingly competitive.
There is correspondingly less competition in the buying market compared to the overheated period during the pandemic, when buyers rushed to take advantage of the stamp duty holiday and gain more space. Therefore new buyers will have choice and more bargaining power if they find a suitable property but feel that it is overpriced.
If you are thinking about selling your home, the first step should be to consult your local estate agent. They will have a good idea of the state of the local market and will be able to advise you on a suitable asking price.
If you are looking for estate agents in Hackney Central, please get in touch with us today.