London’s housing market has seen its busiest period in four years. This is partly because London landlords are trying to get rid of their properties before the budget this week.
Zoopla’s property search site, Zoopla, reports that almost a third (33%) of properties currently for sale in certain parts of London were previously rented.
In WC postcodes (which include Westminster, Islington, and Camden), 32 percent of homes for sale have been rented in the last four years. In EC, where popular rental areas like Angel, Clerkenwell, and Shoreditch are located, 27 percent of the properties on sale were previously rented.
Since 2020, at least 12 percent of homes on the market have been rented for a period of time.
Zoopla data shows a steady flow of landlords leaving the rental market ever since 2016. Buy-to-let investment has become less profitable due to tax and regulatory changes. Some landlords are still worried that they may be targeted in this week’s Budget.
Zoopla estimates that 7 percent of all home purchases in this year will come from landlords who have mortgages. This compares to 10 percent last year, and 15 percent in 2008 during the run up to the financial crises.
Chris McLaughlin of Ocean Estate Agents, Bristol, stated that “buy-to-let has declined significantly as small or accidental landlords have left the market due to less favorable financial conditions and increased regulation.”
“As a result, a large part of the new housing stock consists of former rental properties. In the last few months, the number of completed transactions has increased, especially in the investment property sector. This is because sellers are rushing to close deals before any possible budget changes.
The departure of landlords has created an opportunity for first time buyers to enter the housing market. The average asking prices for previously rented homes is £307,000. This is 16 per cent less than the average UK asking prices of £365,000.
The first-time buyer group is expected to make up 36 percent of all sales this year. This makes them the most active segment in the market.
Richard Donnell said that the rapid rise in rents and the drop in mortgage rates by 2024 has “shifted the dynamics of renting versus purchasing”, according to Richard Donnell, Zoopla’s executive director.
The average mortgage payment for a first-time buyer has dropped by 17 percent compared to renting. This is a significant difference from the 2 percent difference at this time last.
Due to the increasing number of first time buyers and the exiting landlords from the market, the activity on the housing market has reached its highest level since 2020, after the post-lockdown bubble.
Zoopla estimates sales of 306,000 homes are taking place in the UK. This is 30 percent higher than the same point in 2023, and the highest level in four years.
Donnell stated that the “large number of homes available for sale” kept house price inflation under control, with the average asking price only increasing by 1 percent over the last 12 months.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.