27th Apr 2023|News|Sales|Lettings|BTR & Asset Management|

The Property Market In Review – April 2023

April has been a month of growth for the property market across most sectors: farmland values have soared, BTR investment has risen, and first-time buyers have entered the market in their droves. Here’s our outline of April activity across the property market:

Farmland Is Blossoming

Agricultural land is performing exceptionally well this year, with bare land in England and Wales steadily growing in value, increasing by 11% within the last 12 months. This increase is due to a steady demand for farmland, paired with very low supply, creating an imbalance which is driving up prices to record high of £8,728/acre. In terms of asset performance, farmland has performed better than the UK residential housing market, including prime central London properties, as well as the FTSE 100, demonstrating that farmland remains a stable investment as a hedge against inflation.

Seller Profits Boom

Zoopla’s latest research spells very promising news for prospective sellers as they revealed that 97% of sellers made a profit upon selling their property when compared to the original purchase price. The property giant also estimate that the average capital gain made from the sale of a property sits at £67,000, with London prices almost doubling this at £120,000. With data from Zoopla suggesting that those selling up in 2023 have most likely lived in their homes for an average of 21 years, this equates to a value boost of £48 each day. So, if you are considering offloading parts of your portfolio or selling up, now is the perfect time to do so.

First Time Buyer Market Improves

The number of properties listed as ‘sale agreed’ has reached pre-pandemic levels as the property market stabilises. Mortgage rates are slowly coming down, with the average five year fixed-rate mortgage now at 4.63%, down from 5.89% just six months ago. As a result of this stability, the number of first-time buyers purchasing properties across the country is increasing: the first-time buyer section of the property market is 4% larger now than it was prior to the pandemic. This strongly indicates that faith in the property market is being restored as many first-time buyers are choosing to take the leap towards property ownership, despite house prices being high. Rightmove has also reported that the average value of properties purchased by first-time buyers has reached an all-time high of £224,963, further solidifying that trust and investment in the real estate market is growing.

Growing Support For Decent Homes Standard

One in five tenants live in properties that are unfit for habitation, which has prompted the government to review its rental policy and publish the Renters Reform Bill in the near future. 6 in 10 landlords are believed to be supportive of the proposition to introduce the Decent Homes Standard as part of the bill to enforce stricter regulations across rental properties in the UK. Rental units must have reasonably modern facilities, be in a decent state of repair, and be able to provide a standard level of thermal comfort for inhabitants. If homes do not meet these standards, tenants are entitled to claim back the cost of their rent. We anticipate that this will encourage many landlords across the UK to re-evaluate the properties in their portfolio and act with greater urgency to make amends to their units.

BTR Investment Booms In 2023

Recent research has demonstrated that the rental market is experiencing a similar boost to the sales market, with UK BTR investment exceeding £11 billion for the first quarter of 2023. BNP Paribas Real Estate, who carried out the research, indicate that approximately 80% of the investment was outside of London, and the majority of units scheduled for construction are single family homes in suburban regions. This is despite a range of deterrents for investors, namely 15.5% inflation on construction materials and 50% increase in pipeline delays between approval and construction. This demonstrates the magnitude of confidence that investors have in the BTR market, and how important the sector is set to become in mitigating some of the damage caused by the chronic undersupply of houses across the country.

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