skip to main content
  • *
  • *
  • *
Find Insight DIY on
* * *

UK DIY News

Average House Price Reaches Record High: No Hope For Generation Stuck?

William Barton / shutterstock / 1787318480
  • British renters experience 8.3% average increase over last 12 months, outpacing new let rental growth
  • 19% of tenants have experienced having to change rental properties more than five times in five years because of landlords and not through any fault of theirs
  • 17% of tenants say that they have lost out on a property they wanted to rent in the last two years due to a bidding war
  • 15% of landlords say that they are considering selling up due to rising costs
  • 18% of Brits say they were about to become a buy-to-let landlord, but the increased rules and regulations dissuaded them from doing so

David Hannah – Group Chairman of Cornerstone Group – discusses what is needed for renters to get onto the property ladder:

Latest research from Rightmove has revealed that the average British house price reached a record high of £375,131 in May, reflecting a 0.8% monthly increase. This surge, equivalent to a £2,807 rise, is driven by pent-up demand from buyers who had paused their plans last year despite sustained high mortgage rates. Additionally, the number of sales agreed in the first four months of the year was 17% higher compared to the same period last year. These findings were released as tenants renewing an existing contract in Britain typically saw their rent rise by an average of 8.3% over the last 12 months, outpacing rental growth on newly let properties. This news continues to destroy the morale of Generation Stuck – those Brits currently unable to buy a home and leave the rental market – with data from Cornerstone Tax – the UK’s leading property tax experts – revealing that a staggering 42% of renters fear that they will be stuck renting of the rest of their lives.

David Hannah, Group Chairman of Cornerstone, highlights that whilst clear affordability issues remain in the housing market, speculation of an interest rate cut later in the year could mean that there is a glimmer of hope on the horizon for those currently stuck in the perpetual cycle of renting. Cornerstone’s research report highlights the dire need for change in the rental market, which has been marred by rising prices and increased competition. Notably, 17% of tenants report losing out on their desired rental properties due to bidding wars within the last two years. The situation is also desperate for those who are lucky enough to secure a property, with a staggering 19% of Brits saying they have had to change rental properties more than five times in five years because of landlords and not through any fault of their own.

The escalating cost of renting has been a significant driver of change in the rental market, with the average cost of rent increasing by 8.3% over 2023; a figure buttressed by soaring interest rates and landlords passing on their escalating expenses to tenants. As a result, 15% of buy-to-let landlords have decided to exit the sector, as revealed by Cornerstone's research. The tax advisory firm cites the mounting costs as a primary reason for selling their rental properties. Furthermore, the survey uncovers that 18% of potential buy-to-let landlords have been discouraged from entering the market due to increased regulations and rules. This growing reluctance of buy-to-let landlords to enter the market will only serve to exacerbate the supply and demand issues which are currently causing upward pressure on prices and bidding wars due to the lack of stock.

Group Chairman of Cornerstone, David Hannah comments:

“The relentless surge in interest rates by the Bank of England last year severely compromised the affordability of mortgages and affected buyers' spending capacity. Yet, amid this challenging landscape, the latest report from Halifax may provide those stuck in the rental market with a glimmer of hope. Speculated interest rate cuts and the first recorded drop in house prices in six months, may suggest that affordability issues could subside towards the end of the year and early 2025. So, while the road ahead may seem uncertain, it's important to remember that even in the face of a challenging market, the property market can adapt and rebound, offering opportunities for those who remain vigilant and strategic.”

Source : David Hannah, Chairman of Cornerstone

Image : William Barton / shutterstock.com / 1787318480

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.  

20 May 2024

Related News

view more UK DIY News
*

Insight DIY always publishes the latest news stories before anyone else and we find it to be an invaluable source of customer and market information.

*
Max Crosby Browne - CEO, Home Decor
Newsletters

Don't miss out on all the latest, breaking news from the DIY industry