5th Jun 2023|News|Sales|Lettings|New Homes|BTR & Asset Management|

The Property Market In Review – Property News May 2023

As June gets into full swing, Centrick looks back at all of the must-see property news from the past month. From the progression of the Renters Reform Bill to the rise of co-living, and the re-introduction of deposit free mortgages – here are the property news headlines you may have missed:

Zoopla’s House Price Index

On 30th May, Zoopla released their monthly House Price Index. This is a valuable insight into the trends across residential real estate. You can view the House Price Index here but, if you’re looking for a brief rundown of the most important findings, we’ve curated them below:

  • There has been an annual percentage change in house prices across the UK of +1.9%. This is corroborated by Rightmove who report a +1.8% change in house prices
  • The cities where house prices have achieved the most significant boost are Nottingham (3.9%) and Birmingham (3.8%)
  • Market confidence is surging, and more homes are being listed for sale as a result
  • The number of sales agreed has increased 11% compared to the 5-year average

So, what does this mean?

Ultimately, despite the ebbs and flows of the UK’s property market and its response to high inflation, changing mortgage rates and the cost-of-living crisis, the market is remarkably stable. This bodes particularly well for investors, who are likely to continue seeing long-term property price growth. Similarly, sellers can expect to see relatively quick sales providing that they price their properties appropriately.

Renters Reform Bill

In May, the government introduced its Renters Reform Bill to parliament. This new legislation will impact all landlords and tenants across the UK by setting out new guidelines and standards for private rental accommodation. It is hoped that the reforms will make it easier for landlords to deal with difficult tenants whilst simultaneously improving living standards across the nation. This comes as Birmingham has started to introduce selective licensing, which similarly aims to tackle rogue landlords. The scheme, which has been rolled out across many UK districts, also enforces compliance with building health and safety standards.

The main proposals of the Renters Reform Bill are:

  • The Decent Homes Standard, which states that all homes must meet higher health and safety standards and be in a useable condition
  • All tenancies to be moved to periodic as standard
  • Abolishing Section 21, meaning tenants must be given a justification if their landlord wishes to terminate their tenancy
  • Amends to Section 9, which gives landlords greater power to evict tenants that are not compliant
  • New PRS Ombudsman to settle disputes quickly and effectively
  • Greater rights for tenants to keep pets or children at their property
  • Removal of blanket-bans on tenants claiming state benefits

Want the full rundown on the Renters Reform Bill? Check out our blog on the proposed rental reforms here!

Deposit Free Mortgages

Near the start of the month, Skipton Building Society announced the introduction of deposit-free mortgages. This will allow tenants to obtain mortgages without placing down a hefty deposit – they simply have to provide evidence that they have been up to date with their rent and meet affordability.

This is the first deposit-free mortgage option made available to buyers since 2008, and has been met with equal amounts of criticism and praise. Although this sets out yet another way to get eager tenants onto the property ladder, many are sceptical about the potential pitfalls such as negative equity, high interest rates of 5.49% for the mortgage, and the association between higher loan to value mortgages with the financial crash of the late 2000’s.

We’ve got a simple rundown of everything you need to know about Deposit-Free Mortgages on our blog!

The Rise Of Co-Living

The co-living sector has trebled in size since 2019, with this mode of living set to expand even further over the coming years. In fact, over 21,500 co-living domiciles are in the pipeline. This clearly demonstrates an appetite for this type of unit for developers, investors and residents.

Co-living refers to a housing model wherein three or more unrelated individuals reside within the same home. They share communal areas such as kitchens and lounges, similar to traditional student accommodation. The model is immensely popular in London where space is tight and prices are high and provides a community-driven solution that is attractive to students and young professionals. Co-living is becoming so popular that 51% of European investors have stated their intention to move into the co-living real estate market in the near future, making this a sector to keep your eye on. This comes as build to rent models similarly surge in popularity thanks to their community initiatives and shared amenities that encourage a more ‘social’ way of living.

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