Property Natter - The good, the bad…and the ugly

Interesting news from Leaders Romans Group (LRG) this week when they revealed sales figures across the group for June.

Nationally, sales figures were up by 11% month on month and new instructions rose by 8% on May.

The number of valuation also increased by 6% annually and 5% for the month.

So what does this mean?

Their managing director at the group’s Mortgage Scout, Sarah Thompson, went as far as to say they had enjoyed an ‘exceptional’ Q2 – proving beyond doubt that there is still a big chunk of business to be done despite the headlines.

Perhaps the slippage in house prices in some areas has given some buyers the confidence to enter the market and perhaps those who had mortgage offers in principle at decent rates are now keen to press ahead before those offers expire.

LRG’s auction houses have been busy, too. First For Auctions has made sales of £31 million so far this year, receiving interest from 3,500 buyers. Their New Homes Division sold 150 plots (the same as Q2, 2022) and the value of new homes sold so far in 2023 is more than £120 million.

One of the reasons they give for their success here is the greener credentials of new-builds that seem to appeal to many buyers.

But what the figures indicate across the board is that people are still moving, wanting to buy houses, aspiring to take that next step up the property ladder.

But is it just a blip?

Not according to National Sales Manager Kevin Shaw who says he doesn’t expect to see significant change over the Summer months.

“Sellers and purchasers who are motivated to move by Christmas will need to bear in mind the slightly slower market and start planning for the move imminently. Typically, it takes three weeks to get the sale underway and then four months for conveyancing.”

So if you want to be in the new place by Christmas, best get your skates on!

‘Triple whammy for landlords’

Of course it’s not all good news (it never is!) and there was some worrying data about the PRS in London following research conducted by the London School of Economics and Savills. It showed that the number of London properties available for private rent had fallen by a massive 41% since the Covid-19 pandemic. This compares to 33% nationally.

At the same time, asking rents are up 20% on March 2020 and affordability is becoming a major problem with one councillor claiming that London accounts for two-thirds of England’s temporary accommodation placements.

Savills director, Abigail Davies, explained that the PRS in London provides homes for more than a million households.

“Many landlords have high levels of borrowing and find themselves at the sharp end of the turmoil in the mortgage market.

“The triple whammy of rising costs of borrowing, greater exposure to tax and regulatory changes means many are exiting the sector, putting downward pressure on supply against ever-rising tenant demand. Without doubt this will compound the problems faced by lower income households and points to the need for policy that favours the delivery of affordable homes across the capital.”

A problem shared….

It is no coincidence that the battle of the political deputies (featuring Oliver Dowden and Angela Rayner in the absence of their respective leaders) was fought over questions relating to the housing crisis.

It would be tempting to think that Governments of every shade have made a mess of things over many years.

But here are the words of an industry leader – one Marc Pigeon.

He believes the world needs more housing to respond to demographic change, and the migratory flows caused by war, poverty and climate change. He notes that the supply of housing is inadequate and unaffordable because prices have been rising steadily for 10 years, faster than incomes.

And Marc Pigeon isn’t talking just about the UK. He is the President of Build Europe and he’s made his position clear in a letter to Housing Ministers of the G7 nations, no less.

He says in his letter: “…increasingly unaffordable housing supply is a social bomb ready to explode at a global level.”

Clearly, we are not alone.

Until next time…