Rightmove is warning of likely price falls in the second half of 2022.
Its latest monthly market snapshot actually shows yet another record high average asking price, but it warns: “After a very strong first half of the year, it is likely that affordability constraints will have a greater influence on market behaviour in the months ahead, with further interest rate rises anticipated.
“This, alongside more choice coming onto the market for buyers and the usual seasonal variations we’d expect, means that there are likely to be some month-on-month price falls during the second half of the year.
“We expect this to bring house price growth by the end of the year to around the five per cent we originally predicted in December.”
Price falls - no matter how limited - May present investment opportunities for shrewd landlords.
Rightmove director Tim Bannister says: “The exceptional pace of the market is easing a little, as demand gradually softens and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years.
“When we look at the number of buyers contacting estate agents compared to 2019 or the pre-pandemic five-year average, demand is still very high compared to what was once considered normal.
“We’re hearing from agents that though they might have had slightly fewer enquirers for each property in recent months, they’re still seeing significant interest from multiple buyers and are achieving successful sales.
“Entering the second half of the year, we anticipate some further slowdown in the pace of price rises, particularly given the worsening affordability challenges that people are facing. We expect this to bring the annual rate of price growth down from the current 9.7 per cent towards the five per cent increase that Rightmove predicted at the beginning of the year.”
Meanwhile the portal’s latest market figures show the price of property coming to market hitting a fifth consecutive record of £368,614, albeit only up by a modest 0.3 per cent in the past month as the pace of price growth slows.
Rightmove also warns that a conveyancing log-jam means that those who are looking to move this year and have yet to act will need to do so in the coming weeks.
It is currently taking 150 days to complete a purchase on average after agreeing a sale, 50 days longer than at this time in 2019.
This means that those who are hoping to complete a deal in time to enjoy next Christmas in a new home, need to come to market in the next few weeks to give themselves the best chance of finding a buyer and completing the transaction by the end of the year.
There are more than 500,000 homes that are currently sold subject to contract, a massive figure which is 44 per cent higher than it was at this time in 2019, and 39 per cent higher than the pre-pandemic five-year average.
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Nobody is going to invest in the private rental sector if tenants are going to have security of tenure.
Landlords put profit before people, because they are largely motivated by greed and so the government is doing the right thing for tenants. Left unchecked, landlords would continue using a flawed business model that only benefits them, but fails to service the needs and demands of the customer, the tenant.
Luckily, after living in a cheap council flat for 9 years, I now have purchased my own home nearby. I recall the life as a private tenant and it wasn't nice, especially at double the rent. At least the council actually come out and fix stuff, and don't rip people off unlike private landlords who'd rather save and make quick buck at the expense of the tenant. The tenant will no longer tolerate that as the government will continue to alter the balance of power and responsibilities.
I remember the private rental sector in the 1970s and 1980s when the Rent Acts were in force; the private rental sector was virtually non-existent.
And you are generalising Jason - not all landlords put profit before people. I have just advertised a flat at £1000 less than the other flats in the area, simply because I know that tenants can't really afford the huge rents being asked - and because I have no desire either to take all that money off people.
Many private landlords carry out repairs extremely quickly too. I aim for a 30 minute response time to repair requests.
You have had bad experiences as a private tenant. And I know how you feel. I was a private tenant in Cannes - South of France - and felt tremendously ripped off by the huge rent I paid. I felt I was being stolen from.
Had I been paying a fair amount, I would have been grateful to have had the opportunity to live in the South of France for a while - and I would have still recognised that I wasn't the owner of the flat I was renting.
Jason, I'm really pleased that you are now a home owner and not looking to rent off one of us
Well Jason,
Good for you
Being lucky in getting social housing.
How did you do I didnt think there were many left?
Did you then qualify for right to buy?
Then you have bought a discounted property and removed yet another house from the social stock and you will make a huge profit when you sell. No profit incentive there then. But like I say I am genuinely pleased for you in your efforts to move up in your life.
At this rate you may in a few years time earn surplus funds to want to start investing it. To make your money work for you. Sadly due to current sentiment you will be denied the opportunity to invest in a property portfolio.
Still regarded as the safest form of investing.
Instead you will only have the likes of maybe Bitcoin?
Ah if you had, your investment would be nearly gone.
In comparison property prices have doubled about every 10 years.
However this is not necessarily growth in the investment. But weakness in the currency falling in value by half every 10 years.
Remember lots of us started where you are.
And want to better our circumstances.
Most opportunities in regards to properties have gone to the HMRC. Whatever opportunities LL's have or had are been restricted by the government and regulatory bodies.
Any house price falls would be an opportunity for the FTB to get in before the interest rate hike.
I have noticed even where I live that houses are staying for sale longer, people are cautious and are not jumping into offering crazy money over the asking price. It is on the turn.
Its hardly news to Landlords who have been continuously sanctioned, what would anyone expect to happen. That said they know we can do nothing about it, leave we are hammered with capital gains tax purely on inflation or money devaluation take your pick. So Gov’ will have that + big SDLT from new buyer which is as good as c/gains if one can be found. With regards to opportunity for first time buyers, Its an opportunity to get into serious financial trouble with interest rates rising and get caught in a falling market then realise the property is worth far less than they paid for it. I think we have learned that one the hard way in the past, as fo LL’s staying in getting hit at the end with C/gains tax with no opportunity to pass on your life’s times work to family members, we are simply held to ransom.
That was as meant to be as good as Inheritance tax for Gov’, c/gains + SD !.
Jason I think it’s a bit of a cheek, you had 9 years cheap living subsidised by us tax payers to feather your nest at our expense then want to say we at motivate by greed, look a bit closer to home.
On Michael's point about passing on property to family members, I inherited my father's property and an inheritance tax bill of well over a million pounds. It has been difficult to find all that money. I've kept the property because my father wanted me to have it for security in the future, but the Government wants the halfpenny and the bun - all that inheritance tax and now control of the property, too. They have also had my unpaid labour in repairing everything in the houses and managing everything. It is very unfair. The only upside is that I now know how to change locks, plaster ceilings etc.
Yes you soon learn how to do these things as a landlord, who said we sit at home watching the money roll into our bank accounts, they know nothing
Exactly Andrew - and all the money from the rents, in my case, has rolled out to HMRC for inheritance tax and income tax - and when there is an empty period, 100% council tax to pay, too. And licensing costs, as well, to the local authority.
And when I die, all the inheritance tax will be payable again!
The accountant said that the best thing to do is simply spend the money.
A lot of today's experts are either too young or their memory is failing them as they don't remember the periods leading up to the last 2 crashes. The market now is nothing new, and we can expect a few years of this before the crash. I have more faith in the18 year cycle which would point to 2026 for the next crash. All these people claiming there's going to be a crash this year - end up being right eventually I guess.
2026 Should be about right, we'll have a labour government by then
I think Jason is a hoax.
Likely is, I don't mind a hoax on here, I find them amusing
Ellie. I understand your comments on Inheritance tax, I had a friend of 50 years same situation more or less
never put foot wrong worked every hour. Cancer took him at seventy, trusted his Estate to the professionals /Accounts & Solicitors instead of family, big mistake they had last power of itinerary, 4 years on brothers & sisters still waiting for anything from his Estate. Some properties sold under value to pay the tax. His wife wasn’t happy about how it was been handled and contacted the Solicitors, they told her they don’t even have to speak to her. Keep clear of Lasting Power of itinerary .
That is a very good warning Michael.
It is possible for the family to deal with everything themselves. It is not that complicated and there is an Inheritance Tax helpline which is useful.
Ellie Edwards - Your accountant has a point, and one I am starting to come round too, I first purchased my properties to make MY life more comfortable in later years, I am now coming close to that time, a combination of the S21 mess and the EPC nonsense has me firmly on the “ Sell the lot” track. I will do it as tax efficient as possible, but I want to use the wealth I have built up and help my kids now, not when I am dead. I also want to really enjoy the years my wife and I have left. We all think we have more time, until life tells us otherwise.
I think that may be the best way forward for all of us - giving everything to HMRC and working for nothing as I have been, doesn't seem very wise. And as you say, the loss of Section 21 and the EPC changes seem to be compelling that decision.
Totally agree. Aiming to have sold my final 2 target properties by 2025. The remainder should all be mortgage free soon after that and I'll then start passing on sufficient each year to the kids to use up all our CGT allowances. With a fair wind, our estate will be IHT free by 2032, there'll be sufficient for me to enjoy what's left, and the kids get the lot after we've shuffled off this mortal coil. Declarations of Trust will work wonders to help. A good lawyer who understands the plan is worth their weight in gold.
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