The property market has certainly been hit recently both on the sales side and the lettings side.
SALES
Property prices are being reduced. Properties have enjoyed great selling prices in the last 2 years, unfortunately, what purchasers could afford 12 months ago has been dramatically reduced by the soaring mortgage interest rates. For example, 12 months ago, a property costing £400,000 with 25% deposit could borrow £300,000 at a rate of 1.5% over 25 years, and the repayment mortgage would cost £1199.00 pcm. Now at 6% the same mortgage would be £1932.00 pcm. If a purchaser wants to keep to the equivalent monthly outgoing of £1199.00, then they would be looking at property prices of around £285,000 (£115,000 cheaper).
LETTINGS
We have the opposite happening on the rental side. Over the last few years, we have seen landlords being hit with the mortgage interest relief being taken away from them and moving to the Airbnb side of lettings, where it is a tax allowable expense. This has reduced the stock available for long term renters. We now have a double whammy of the interest rates having increased for the 13th month in a row, which is resulting in landlords either exiting the market or increasing the rents. Either way, with less stock for the rental market, we are seeing rents climbing to unprecedented levels and will continue whilst stocks remain low.
At Move On, we are helping landlords sell their tenanted properties to investors. If you would like an informal chat on your options, please Email sharon@moveon.biz or ring me 01202711169.
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