UK Sales and Lettings

Summer Snapshot of UK Sales and Lettings

A shortage of good quality stock in both the sales and rental marketplace has affected overall pricing and dynamic movement in the industry. However, a few key factors such as buy-to-let investment, well priced stock and the continual demand from prospective buyers all point towards a busier autumn season, rental management figures suggest.

Over the summer months the national shortage of property for rent has been largely driven by the difficulties facing first time buyers when applying for mortgage finance. In addition to this, many renters are choosing to stay put due to the uncertainty of which direction the house prices will go in over the next few years.

However the sales market has not been so stagnant and the volume of sales reported in July for Hamptons International (a premier property agent) showed an increase of 24 per cent. This is all the more impressive if one considers the amount of negative press surrounding the UK property market and economy over recent months. The formation of the new coalition government gave the market a post-election bounce; this has carried on into August giving Hamptons International a 10 percent increase in value when compared to 2009.

Shortage of stock is however not such a detrimental problem for the landlords; the average rental renewal increase is now over six percent for Hamptons. Furthermore landlords who stood fast during the economic storm are experiencing income growth across their portfolios twinned with the improved yields. This is a key point that demonstrates to new investors that there is profit to be made in the UK rental market. Those who see residential property as a long-term investment would find Autumn/Winter 2010 a good time to enter the market place: also highlighted by the rise in buy-to-let mortgage approvals. This type of mortgage has been virtually non-existent over the last two years but the Council of Mortgage Lenders recently reported 15 percent growth during the second quarter of 2010.

Property is in high demand whether it is for rental or for sale. Hamptons International has reported there are six applicants for every one of their rental properties and seven for every sale property. Although according to Mark Goldberg, the Head of Sales for Hamptons, in order to sell the property it needs to be “well-priced.” It is the vendors that that have used common sense, done their research into local rates and priced their houses accordingly that have experienced fast paced success.

Despite August being a traditionally quieter month for the property market, there has boost in the number of enquiries for sale properties. Together with the improving mortgage conditions and the interest from new investors in the rental market it points to Autumn 2010 being an active season for the market place overall.