Housing market confidence continues to grow in some UK regions, and the rebound in prices was witnessed in July 2018(as per RICS data), while the investors are highly positive about sales and prices. The Ulster Bank and RICS survey claim the shoppers were optimistic about housing markets and expected growth in activities in the sector.
Home prices rose in July by 3.3 per cent (y-o-y), and the annual prices of homes are expected to rise at the rate of 2.5 per cent per Halifax. HomeLet found average rent inflated by 3.3 per cent in London in July (y-o-y), whereas the average rent in the UK (other than London) grew 1 per cent. In July, the gain was 1.4 per cent more than in June 2018, and the average housing cost was reported to be £230,280.
Growing Rents Due to The Housing Crisis
According to the survey by online property firm HouseSimple - In July, new property listings fell in the UK by 6 per cent. The survey was conducted on 100 cities (and towns), and the highest drop in supply (as per new listings) was recorded in Blackburn, Winchester, and Lichfield.
In London, new listings increased in June, but in July, there were significant reductions in most regions. The highest drop in listings was seen in Camden in London.
RICS claimed due to supply shortages, rents will continue to grow in the UK. The number of people looking for rental homes grew; nevertheless, supplies were low, leading to higher rents. The sharpest growth is expected in East Anglia and South West.
Many landlords are selling due to a rising tax burden and maintenance costs on BTLs. In addition, in the last few months, many buyers stayed away from investing in buy-to-let due to changes in tax regulations and an extra 3 per cent stamp duties.
Brexit and market volatility kept buyers restrained, and Halifax expects the market to remain the same in the coming months, but there has been a rise in mortgage affordability and mortgage approvals, and earnings continue to rise; hence, pressure on housing finance will ease, leading to a boost in buying.
House Price Growth by Region
In 2017/2018, housing prices grew more than wages, reducing overall housing activities. Inflation may keep first-time buyers away from the markets. Some regions in Scotland and Edinburgh had a kind of boom in property markets. Still, the lack of stock and fewer quality homes pushed people to pursue alternative locations.
Most investors seek two-bedroom apartments – which are considered suitable due to sustainable demand. In Edinburgh, the rent of a four-bedroom house grew at an average price of 6.8 per cent. Overall the rents grew 4.8 per cent in Edinburgh in Q2 2018, where it takes just 20 days for the property to be let.
Halifax economic advisors believe the price gains will be 2 to 3 per cent for the rest of the year. As per RICS, rents will grow by 2 per cent in twelve months.
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