HOUSING MARKET SLOWS AS RENT COSTS HIT RECORD HIGH
- NAEA Propertymark and ARLA Propertymark provide analysis of their 2019 sales and lettings data1
As we near the end of 2019, Propertymark has analysed its sales and lettings data to reveal trends from the year.
NAEA Propertymark’s overview of the housing market:
- Over the course of 2019, demand was slightly higher than last year with an average of 320 house buyers registered per branch, compared to 318 on average throughout 2018. Looking back over the last decade, demand is up by 16 per cent, from 275 per branch in 2009.
[Figure 1: demand for housing over the last 10 years]
- The number of properties available to buy hasn’t changed significantly year-on-year, with 39 available per branch throughout 2018 and 38 in 2019. The month of August saw the highest number of properties this year, with an average of 44 available to buy. Supply has dropped considerably over the last decade, from 65 on average per branch in 2009.
- The number of sales agreed per branch through the year remained the same at eight on average per month in 2019. Historically, this figure has stayed consistent, only moving between nine and seven between 2009 and now.
- The proportion of total sales made to first-time buyers (FTBs) increased by two percentage points in 2019, from 25 per cent in 2018 to 27 per cent.
Mark Hayward, Chief Executive, NAEA Propertymark comments on the findings: “2019 has been an interesting year for the property market. House buyers and sellers have been faced with a lot of uncertainty, which in turn affects sentiment and decision-making. Activity in the housing market has remained consistent when compared to the last year, which was expected, as buyers and sellers hold off on purchases until the outcome of the General Election and Brexit is clear.”
ARLA Propertymark’s overview of the private rented sector:
- The supply of rental accommodation increased in 2019, from 187 on average per branch in 2018, to 197 this year. It reached an annual high in March, when letting agents were managing 203 properties per branch.
- As landlords continued to feel the pinch, the number of buy-to-let (BTL) investors selling their properties remained high, at an average of four in 2019. In April, the figure spiked to five per branch.
- The number of tenants experiencing rent hikes hit a record high this year, rising from an average of 26 per cent each month in 2018, to 46 per cent on average this year. This is due to the impact of the tenant fees ban, with 64 per cent of tenants experiencing rent increases in August – the highest figure seen this year.
- Agents reported an increased number of prospective tenants searching for homes in August, when 76 were recorded per branch, compared to 73 on average across the year.
David Cox, Chief Executive, ARLA Propertymark comments on the findings: “It’s no surprise that tenants have suffered intense rent increases this year. We predicted this would happen as soon as the Government announced a ban on tenant fees, and since the ban came into force in June, rents costs have continued to spiral. Additionally, due to the significant amount of legislation that landlords face, this year they have continued to exit the market, which coupled with Brexit uncertainty and the looming general election has left the sector in a state of despair. Unfortunately, next year could go the same way, unless something is done to make the sector a more attractive investment.”