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Spring into Action!

Monday, March 7, 2022

As we head into March, identified by Rightmove as the strongest month for prospective sellers to come to market, here’s a snapshot of what’s trending in the UK property market and what’s likely to make most impact on buyers, sellers, landlords and tenants in the coming months. Warmer weather is on the way and as the clocks go forward on Sunday 27th March, we see lighter evenings and further increase in buyer activity as thoughts turn to moving. Online buyer searches for gardens for example have increased significantly as people look for outdoor space heading into spring. So, is it time to spring into action?

Tim Bannister, Director of property data at Rightmove recently commented: “For any sellers who might be conscious of coming to market at a time when the number of new listings has traditionally been high, the data shows us that the level of demand in March means sellers are likely to be met with multiple potential buyers competing for their home.” For those hoping to both sell and buy, it’s important to ensure they have their current property on the market or preferably sold subject to contract for the best chance of securing their next dream home.

In February, the UK interest rate increased from 0.25% to 0.5% as a measure to help bring the rate of inflation down. Whilst this may impact some buyers’ confidence, in conjunction with pressure on household budgets from a rise in the cost of living, mortgage rates are still relatively cheap. Many have fixed-rate mortgage products, and about half of UK homes are owned outright so these owners will be largely unaffected by interest rate rises. It is likely therefore that the rise will have done little to dent the current positive sentiment in the property market.

The average price of a UK residential property hit an all-time high in January, according to Halifax. House prices were up by 9.7% compared to a year previously. But the pace of growth slowed in January with an increase of 0.3%, following four consecutive months of gains above 1%. A lack of properties on the market continues to inflate prices as supply is outweighed by demand and while that continues, it remains a seller’s market and vendors are likely to secure a good price for their property when coming to market.

The flip side of this situation is that affordability is low with house price increases outstripping earnings growth and with many buyers reviewing their budget as the rising cost of living eats into disposable income. There are still significant barriers to home ownership in terms of amassing a deposit for first time buyers. That said however record numbers of first-time buyers took their first step onto the property ladder in 2021. If finances are challenging, it’s vital to seek advice from the experts. The Frost Partnership works closely with Mortgage Advice Bureau (MAB), one of the UK’s leading independent mortgage brokers and voted Best Mortgage Broker at the British Mortgage Awards for three consecutive years. Their advisers are truly independent and can search thousands of mortgage deals to find the one that best suits your circumstances.

The private rental market is also seeing demand outweighing supply with increasing tenant enquiries and fewer landlord instructions. UK rental stock has however increased by 6.40% since 2017 despite additional taxation measures and regulations, and recent figures show that in the long-term the trend is for growth rather than contraction of the sector and landlords are still benefitting significantly from strong capital appreciation, particularly over the last 12 months.

The private rental sector is vital to the UK property market and the government has set out proposals for sweeping reforms which will be outlined in more detail in a spring white paper. These reforms include introducing the Decent Homes Standard, consulting on a national landlord register, strengthening redress for tenants, and confirming it will abolish Section 21. These may seem highly tenant centric but better licensing and improving quality of properties in the sector is likely to promote positive perceptions of renting and greater confidence in the sector.

Given the current lack of stock in the market, now is a good time for landlords to speak to their local letting expert, and to use 2022 to implement a long-term strategy to manage and protect the investment they have made in property. Energy efficiency is a priority for the sector with rental properties likely to need a minimum energy efficiency rating of C by 2025. The smart money would be on making changes now, both to comply ahead of schedule and to make their property more desirable for tenants. Such changes will result in lower energy bills and may justify a premium and better returns on their rental.

Right to Rent changes come in from 6th April (temporary changes due to the pandemic will end on 5th April) when checks can no longer be carried out over video calls. Penalties for non-compliance range from £1,000 for the first offence to unlimited fines and custodial sentences. This combined with increased legislation/compliance needs may cause more landlords to see the benefit of instructing an agent to help them avoid the pitfalls. Qualified lettings staff in each Frost office are on hand to help landlords with all their letting requirements from finding tenants to legal, health and safety compliance and full property management.

It's a busy time for all involved in property and now really is the time to spring into action. Both sales and lettings markets are extremely buoyant, and The Frost Partnership is here to help with over a century of property heritage and professional advice you can trust to get you the best results. Our forecast for the property market in 2022 is highly positive. Buyer and tenant demand is high and now is a great time to sell or let your property. As the region’s leading family-owned estate agency network, we would be delighted to help you move. If you’re thinking about selling or letting, then please get in touch - you can be confident that you’re dealing with one of the very best estate agents in your area.