New data has revealed that house prices have fallen by 1.3% across the UK over the past six months as more prospective house sellers are returning to the market according to Zoopla.
The data shows that agreed house sales climbed 11% higher than the five-year average, pushing agreed home sales to their highest point of the year in May as the supply and demand level continues to level out.
Housing supply is being boosted by the sales of rental properties as more landlords are choosing to sell after being hit by rising costs and higher mortgage rates, as 11% of homes for sale are former rental properties.
This comes as Cornerstone Tax 2020 has found that just 1-in-5 landlords now say their investment has been a profitable one, with a further one in five admitting that they have lost thousands. As a result, 65,000 rental properties went up for sale in the first three months of 2023, in a move that could aid first-time buyers who accounted for more than one in three sales in 2022.
Zoopla found that the average price of a previously rented home is £190,000, a quarter below the average price of a previously owned house.
David Hannah, Chairman of Cornerstone Group International, believes that these properties entering the market will provide more opportunities for first-time buyers but is also set to exacerbate the rental market which is already registering record rents throughout the UK.
The average monthly rent outside of London has surpassed £1,000 for the first-time ever according to recent figures released by Hamptons.
The data shows that the average rent on a newly let home outside the capital increased by 7.8% annually to £1,002 in April whilst the London rental market experienced an annual rental growth of 17.2%. The average rent in the capital now stands at a record £2,200 as the average monthly rent rose 11.1% year-on-year across the UK in April.
Hannah said, “I think the rental market is filled with uncertainties at the moment, with rising rents making it less attractive from a renter’s standpoint and rising house prices making it less desirable for buy-to-let landlords to grow their portfolios.
“Our research shows that many landlords were not prepared to deal with the current obstacles facing the rental market as 1 in 5 say they became landlords without the sufficient knowledge needed and have lost thousands as a result.
“As costs escalate and financial pressures mount, buy-to-let landlords are making a calculated move to sell their properties. The sharp rise in expenses, ranging from maintenance and management fees to taxation and regulatory burdens, has compelled some landlords to reassess their portfolios.
“The influx of former rental properties will provide more opportunities for first-time buyers as the average price of a previously rented home stands at £190,000 – considerably lower than the average property price in the UK.
“However, it will further exacerbate difficulties people are facing in the rental market where record rents are being charged throughout the UK.”