The latest residential sentiment survey from the Royal Institution of Chartered Surveyors suggests a currently-subdued housing market but with a more promising outlook for sales activity across the UK following the General Election and the prospect of a fall in mortgage rates.
Over the next three months, a net balance of +20 of survey respondents anticipate a recovery in residential sales up from +10 in June and the highest level of sales expectations since January 2022.
These results indicate that respondents have confidence in the newly elected Labour government which has voiced a strong commitment to boosting the housing market, aiming to deliver 1.5m homes over the next five years, a figure not hit since the 1960s.
Looking at price expectations over the next 12 months, a net balance of +54 of respondents believe prices will continue to rise, highlighting a key challenge for the new government as boosting housing supply in the UK will not be an easy task. However, any boost to confidence from aspects such as the possibility of lower interest rates should in theory intensify the nation-wide affordability challenge.
Tarrant Parsons, RICS senior economist, says: “Although activity across the housing market remained subdued last month, forward looking aspects did improve slightly.
“There are some factors emerging now that could support a recovery in the months ahead. If the Bank of England does decide that the current inflation backdrop is benign enough to start loosening monetary policy next month, this may prompt a further softening in lending rates. In addition, the recent election delivered a clear outcome, with housing pushed up the political agenda.”
Looking across to the rental market, a net balance of +28 of respondents saw a pick-up in tenant demand during June (part of the non-seasonally adjusted data).
Meanwhile, the new landlord instructions net balance slipped from -3 to -11, pointing to a renewed decline in new rental listings. Looking forward a net balance of +38 of respondents anticipate that rental prices will rise over the coming three months - a trend seen since January.
In response to the survey Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, says: “A new government has breathed a new air of optimism into the property market. Agents are hoping this means sales will pick up, and falling house prices will reverse in the year to come.
“It’s the most positive agents have been about sales since the start of 2022, and they’re walking to viewings with a new spring in their step. However, it remains to be seen whether buyers will share their view.
“Before the election, June brought more of the bad news the market has been used to seeing – with falling sales and prices, and dwindling buyer numbers. Things were so miserable that even the number of new sellers fell back. It wasn’t helped by stubbornly high mortgage rates, with Moneyfacts figures showing the average two-year fixed rate remained just shy of 6% for most of the month.
“July may hold more hope, in part because of the election result, and the arrival of a new government. This isn’t because of anything promised during the campaign. Labour didn’t pledge any particular policies to boost demand - except an extension of the mortgage guarantee scheme for those with smaller deposits. Instead, agents are holding out hope for an upswing in consumer sentiment, buoyed by the optimism that a change at the top can engender, and hope that life in general will change for the better.”
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This is the end of Boom & Bust
Yeah , whatever ...
A boom will always be on the way….. we have millions of people arriving every few years, and no real building program 🤷♂️🤔🤷♂️
You can see potential Labour plans for the King's Speech on the Parliament website now. I believe they were published yesterday. This is what they say:
4. Private rented sector
The findings of the English Housing Survey, published in July 2023, revealed that the private
rented sector was the second-largest housing tenure in England, with approximately 4.6mn
households, representing 19 percent of households.30
Labour’s manifesto stated that a Labour government would legislate to overhaul the
regulation of the private rented sector.31 It proposed immediately abolishing section 21
“no-fault” evictions to prevent private renters from being “exploited and discriminated
against” and to empower them to challenge “unreasonable” rent increases. The party also
pledged to take steps to raise rented housing standards in private rented housing, including
extending ‘Awaab’s Law’ to the sector. The law, which can be found in provisions in the
Social Housing (Regulation) Act 2023, was named after Awaab Ishak, a toddler who died in
2020 due to a respiratory condition caused by prolonged exposure to damp and mould in his
housing association home in Rochdale. It imposes “strict” time limits for landlords to
investigate and address damp and mould in their rental properties.32
In the 2022–23 parliamentary session, the Conservative government introduced the Renters
(Reform) Bill, which was carried over to the 2023–24 session. The legislation included a
provision to abolish section 21 no-fault evictions. However, the bill did not complete all its
stages before Parliament was dissolved for the general election.
33
Labour’s provisions to support private renters were welcomed by some housing charities
and organisations, although there were calls for Labour to take further action. The campaign
manager of the Renters’ Reform Coalition, Tom Darling, welcomed Labour’s “continued
commitment” to immediately abolishing no-fault evictions, which he described as a “crucial
first step to rebalance renters’ rights”.
34 However, he highlighted that his organisation had
“urged all parties that they need to go much further for private renters”. This included by
preventing new eviction grounds from being used as no-fault evictions and limiting how much
rent could be increased within a tenancy.
Additionally, Ben Twomey, the chief executive of Generation Rent, described Labour’s
manifesto as “light on detail” on renting reform. 35 He also said that for the end of section 21
no-fault evictions to lead to “proper protections for renters”, they needed “longer notice
periods whenever we face eviction, and clear mechanisms to prevent abuse”. Similarly,
Labour’s commitments to the private rented sector were criticised by the London Renters
Union, which stated that “none of Labour’s new measures would protect tenants facing
inflation-busting rent hikes and outrageous asking prices”.36
What about inflation busting Council Tax and Water bills?!!
Ellie: Many thanks for the update, very informative.
Doesn't read very well, just quotes from various biased parties, surely they need to come up with something that looks a bit more like a coherent policy?
Thank you for sharing, Ellie.
Well I've had 'Awaab's' type of parents with mould. They dry washing inside on days like today with the windows shut. Mould grows, they don't lift a finger. But they know how to claim for compensation and try to use it to avoid eviction. A bit like blocking up vents etc. Thick as 2 short planks when it comes to mould, but are all happy to get Asthma and try for the £££££££. So it's a 'NO' from me.
Ellie
Thank you, but don’t hold your breath waiting for a response from NRLA. 😡
If Labour give in to all the activists’ demands the whole rental sector will cease to exist. The Corporates will not accept most of these terms. If Labour introduce one set of laws for them and another set of laws for the rest of the PRS it will be highly discriminatory.
The information I reproduced above was composed by Erin Waitzman who is a House of Lords researcher.
There is no reported input from a Landlord organisation. I assume that that is because we had nobody to oppose anything that the Government was proposing - or perhaps we are considered to be not worthy of having any input in reforms.
The NRLA seemed to welcome everything.
Ellie - NRLA should be renamed NRTA !
You are right Margaret.
However, I would imagine that no landlord organisation can help us now. What was posted on the Parliament website may reflect what has been decided by the Labour government?
Ellie - it sounds like it. It is short on detail.
We desperately need detail, otherwise we can't let our properties.
Meanwhile Ellie if you are not selling up be extremely careful whom you let to. Be extremely fussy. Better to have a void than a bad tenant.
You are 100% right Margaret.
In any event, I am not prepared to have sitting tenants, so I have to consider what are legal and alternative ways to letting as an indefinite assured tenancy. I am having difficulty in doing that.
Ellie - if you live near your properties you could consider serviced accommodation. Before Section 21 introduced I knew a landlord that changed the sheets once a week in tiny flats and had the flats vacuumed twice a week. He got his way around the rent act then. Of course he charged more rent for this offering. Not sure what the rules are now but I have seen ads for short term serviced lets.
That's a possibility Margaret. There are specific rules in Scotland about serviced flats including having to change the beds twice a week. I am not sure I want the hassle.
Sticking with my plan of having all my properties except one with the guaranteed rent. At least I know I will get paid.
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