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Landlords suffer capital depreciation as housing market slows

Prices fell 1.4 per cent from October, which was the largest month-on-month fall since June 2020.

And annual house price growth saw a "sharp slowdown", the building society says, falling to 4.4 per cent now from 7.2 per cent in October.

Last month the government's official forecaster - the Office for Budget Responsibility - predicted that house prices would drop 9.0 per cent over the next two years.


Robert Gardener, Nationwide’s chief economist, says: “While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum. Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation.

“The market looks set to remain subdued in the coming quarters. Inflation is set to remain high for some time and Bank Rate is likely to rise further as the Bank of England seeks to ensure demand in the economy slows to relieve domestic price pressures.

“The outlook is uncertain, and much will depend on how the broader economy performs, but a relatively soft landing is still possible.

“Longer term borrowing costs have fallen back in recent weeks and may moderate further, especially if investors continue to revise down their expectations for the future path of Bank Rate. Given the weak growth outlook, labour market conditions are likely to soften, but they are starting from a robust position with unemployment still near 50-year lows.

“Moreover, household balance sheets remain in good shape with significant protection from higher borrowing costs, at least for a period, with around 85 per cent of mortgage balances on fixed interest rates. Stretched housing affordability is also a reflection of underlying supply constraints, which should provide some support for prices.”

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    Not of a concern, made a lot over the years, I will still sell up.

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    Like Simon I still aim to sell, have one property going through now and possible to be completed this month. Failed to sell a property at auction but this was a large 4-bed detached and with these houses there is not much movement. It has now been re-let.
    Start work on another property in Bedford, 3-bed end terrace, to give a makeover before bringing to the market, hopefully in February.
    Also still ongoing eviction with a house in Norwich.
    I fail to see why house prices are set to fall for 2 years. Certainly a fall next year, but I don't believe this will be more than 8-10%. With the last 4 years of a rising market most Landlords will have no issues with a 10% drop, those that wish to sell.
    When better deals for mortgage rates come along stand back for the stampede. That said, I think buyers will be more canny but nonetheless small rise in prices and then stability if we don't have more shockwaves from Ukraine or this Government.
    It's all very subjective and depends how quickly you need to release money tied up in a property. If you are a small business owner as well as a Landlord, then you are very likely needing to liquidate your asset quickly, but if a baby boomer whose set to retire you will likely have less pressure on you to make a quick sale.
    The only other issue I have is putting up rents for my remaining tenants. I will be having a frank conversation with them, my rents have always been below market and this will need to change. If they want me to keep the house then rents will need to rise ,a lot, over next 2-3 years. One of two things will happen after this conversation.
    Good luck to all.

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    One of two things will happen, well if they go you'll have a much bigger rent increase


    On this, if they go, then I will sell. As much as I have liked being a Landlord I am happy to stop. I cannot see any change in the coming years to this or any Governments view towards private Landlord's and as such I have no wish to subject myself to it.
    For those that have the appetite I completely agree rents will go up, but eventually this will force the Government to focus on this and then what!!!

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    Agree with Andy, I do fear what Labour will do… they really dislike us. I want out before that time.


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