Housing market slows as rent costs hit record high

Buying demand has slightly risen this year, with an average of 320 house buyers registered per branch, compared to 318 on average throughout 2018, according to the latest findings from NAEA Propertymark.

With the year winding down to a close – and the general election and Brexit shaking the property market – the trade body analysed its sales and lettings data to reveal trends from the year.

The housing market stagnates

The number of properties available to buy hasn’t changed significantly year-on-year, with 39 available per branch throughout 2018 and 38 in 2019.

Supply has also dropped considerably over the last decade – from 65 on average per branch in 2009. However, the month of August saw the highest number of properties this year, with an average of 44 available to buy.

What’s more, the number of sales agreed per branch through the year remained the same at eight on average per month in 2019. Historically, this figure has stayed consistent, only shifting between nine and seven from 2009 to now.

The proportion of total sales made to first-time buyers increased from 25% in 2018 to 27%.

“2019 has been an interesting year for the property market,” Mark Hayward, chief executive of NAEA Propertymark, says. “House buyers and sellers have been faced with a lot of uncertainty, which in turn affects sentiment and decision-making.”

“Activity in the housing market has remained consistent when compared to the last year, which was expected, as buyers and sellers hold off on purchases until the outcome of the general election and Brexit is clear.”

The private rented sector thrives

When looking at the private rented sector, the supply of rental accommodation increased in 2019, from 187 on average per branch in 2018 to 197 this year. It reached an annual high in March, when letting agents were managing 203 properties per branch.

The number of buy-to-let investors selling their properties remained high as landlords continued to feel the pinch, at an average of four in 2019. In April, the figure spiked to five per branch.

Perhaps unsurprisingly, the number of tenants experiencing rent hikes hit a record high this year, rising from an average of 26% each month in 2018 to 46% on average currently.

This is the result of the tenant fees ban, with 64% of renters experiencing rent increases in August – the highest figure seen this year.

Agents also reported an increased number of prospective tenants searching for homes in August, when 76% were recorded per branch, compared to 73% on average across this year.

David Cox, chief executive at ARLA Propertymark, says the results come as no surprise. He says: “We predicted this would happen as soon as the Government announced a ban on tenant fees, and since the ban came into force in June, rents costs have continued to spiral.”

“Additionally, due to the significant amount of legislation that landlords face, this year they have continued to exit the market, which coupled with Brexit uncertainty and the looming general election has left the sector in a state of despair.”

“Unfortunately, next year could go the same way, unless something is done to make the sector a more attractive investment,” he concludes.