HomeProperty InsuranceA costly exodus, a “frenzied” market, sales fall through, and is Spring...

A costly exodus, a “frenzied” market, sales fall through, and is Spring the best season to buy?

UK property news headlines shine a light on the market for homeowners, landlords, and tenants alike.

In the private rented sector, the exodus of landlords continues even among those who face a significant capital loss. The departures from the market leave a sharp imbalance between supply and demand. It creates a practically frenzied scramble for rented accommodation.

Reports reveal the financial costs of house sales that have fallen through at the last minute. Other reports examine when the best time of year is to buy a house.

Let’s lift the curtain on some of those stories.

Claim: Landlords preparing to sell at a loss this year or next

Some landlords are so desperate to quit the buy to let rental market they’re prepared to sell their property at a loss.

A story in Landlord Today on the 17th of April revealed a significant number of landlords preparing to sell up within the next couple of years. Many had invested in the buy to let market in 2014 when property prices were at a peak, but they have now had serious second thoughts about the wisdom of those purchases.

Running a profitable buy to let business has become more challenging as the costs of repairs and maintenance continue to rise. The need for repairs is more acute during winter months when mould and damp build up in homes where tenants open the windows less.

With many tenants spending more time at home, they have also become more demanding and exacting in the standards of accommodation they expect.

Many landlords will also be nervous about the likely costs associated with the evermore stringent energy efficiency standards required for premises in the private rented sector. By 2025, for example, it is likely that all let properties will have to achieve an Energy Performance Certificate (EPC) of at least a C rating.

Renting: Shortfall of properties creates frenzied market, surveyors say

The exodus of landlords from the private rented sector – and the absence of new investors to take their place – has left a stark imbalance in supply and demand. Conditions in the market are “frenzied”, said a report by the BBC on the 13th of April.

The scramble for a diminished number of properties available for rent will have the effect of pushing rents still higher, said the report. This, in turn, will raise the inflationary pressure in the market.

A notable feature of current market conditions is that the increase in rents is felt across the country as a whole and isn’t confined to particular pockets of high demand.

Fall-throughs cost UK property market £1bn in the last year

The number of transactions and average prices for homes have both fallen in the last 12 months. Despite those lower numbers, buyers and sellers suffered a combined loss of more than £1 billion in 2022 when transactions fell through at the last minute. Those losses represent a 6.3% increase in the value of losses sustained the previous year.

But the story outlined by Today’s Conveyancer on the 14th of April did identify one silver lining in the current direction of the housing market. Thanks to a slower market, fewer house sales, and lower average prices, successive quarters have seen a reduction in the losses that can be attributed to sales falling through.

An overall reduction in the number of transactions in a market that is collapsing quarter by quarter represents something of a silver lining for homeowners as the cost of sales that fall through steadily diminishes.

Is Spring still the best time of year to buy a house?

Also picking up on the theme of a slower, more sluggish property market, Which? magazine on the 16th of April asked whether Springtime is still the best time of year in which to buy a house.

There is little doubt that Spring has traditionally been the favourite time to look for a new house. The days are getting longer and sunnier. Homes are shown off at their best in daylight.

If you buy a new home during the Spring, you can plan for a Summer outdoors in the garden. If you have children, that time outside will be well spent during the long Summer holidays.

Buying a home during this season is not without its downside. Because competition from other buyers is likely to be stiffer, you might find it more difficult to snaffle a bargain. If you are under that kind of pressure from other bidders, you might be tempted to make a hastier decision than perhaps you’d like.