According to the latest market analysis from Home.co.uk, a possible reason for a slowing of house price growth are the steadily rising levels of stock, albeit from a record low set in January this year. However, demand remains very strong as evidenced by a near all-time low in the Typical Time on Market of unsold property.
A different picture for rents it seems, as they continue their upward spiral, considerably outpacing monetary inflation by a large margin. Hence, yields are improving rapidly across the country, thereby incentivising Buy-to- Let purchases. Moreover, rental yield growth is certainly outpacing the tardy and tiny interest rate rises by the Bank of England. Furthermore, the unprecedented large and widening spread between mortgage interest rates and inflation continues to incentivise leveraged property purchases.
Rents in Greater London continue their breathtaking ascent. Demand is persistently overwhelming a falling supply of available properties and has pushed annualised rental growth to an alarming 25.4%. Asking rent growth across the UK currently stands at 19.1% year-on-year as rents rise in every English region, Scotland and Wales.
Central London rents continue to set new records as supply plummets. Hackney, Merton and Lambeth boroughs show the greatest rises in asking rents over the last twelve months, with all three indicating an increase of 42%
Despite a small uptick, acute scarcity persists across all regions when compared to stock totals for sale over the last decade. Real mortgage interest rates look to remain negative for the foreseeable future, even when further BoE hikes are factored in. Rents are soaring year on year across all regions and look set to continue to do so. The mix-adjusted average rise for the UK is 19.1%. Supply is worsening in this sector, with newly available rental properties down by 23% compared to June 2021, due mainly to the drop in London. Given the above, we expect demand for UK property to remain high and perhaps rise into 2023 as investors seek the relatively safe returns afforded by bricks and mortar, facilitated by artificially low-interest rates.
The annualised mix-adjusted average asking price growth across England and Wales is now at 6.1%; in July 2021, the annualised rate of increase in home prices was 8.0%.
