The Halifax has issued an unusual warning over the private rental sector within its regular housing market update, saying it is “under some pressure”.
Its monthly index says that elevated interest rates are just one factor impacting landlords’ business models, together with considerations of future rental market reforms.
“It remains to be seen how many may choose to exit and what that could mean for the supply of properties available to buy,” says Kim Kinnaird, Director of Halifax Mortgages (main image).
She also reports that house prices are also being impacted by higher interest rates and a mortgage market in turmoil, revealing that average UK house prices edged down slightly in July, with the monthly fall of -0.3% equivalent to a drop of around £1,000 in cash terms.
“While this was the fourth consecutive monthly decrease, all have been smaller than -0.5%,” says Kinnaird.
“In reality, prices are little changed over the last six months, with the typical property now costing £285,044, compared to £285,660 in February.
“The pace of annual decline also slowed to -2.4% in July, versus -2.6% in June.
“These figures add to the sense of a housing market which continues to display a degree of resilience in the face of tough economic headwinds.”
First rung
Kundan Bhaduri, director of London-based property developer and portfolio landlord, The Kushman Group: “At long last the ongoing fall in house prices will achieve what many have been waiting for, namely a chance to get onto that first rung of the property ladder.
“This decline is helping improve affordability for first-time buyers, who have been struggling to enter the market due to high deposit requirements and rising costs of living.
“This slowdown in house price growth was a long time coming and is a perfect opportunity to rebalance the market and prevent a potential bubble.”
pic credits: Barts NHS Health Trust and The Kushman Group
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