Published: 20/04/2023 By Alex MaileWe are now deep into the bank holiday season and, with the King’s Coronation, there are even more than usual this year. It’s also a very busy time of year for the housing market but many commentators had been waiting to see, after all the recent economic turmoil, how it might react. Last month, as we reported, there were tentative signs the market was coming back to life. This month, those green shoots are starting to appear in greater numbers.
Zoopla has reported that sales volumes are improving and so are supply levels, providing some much-needed choice for buyers. At the same time, the Bank of England’s figures show mortgage approvals are up and, despite yet another base rate rise, mortgage costs are falling. Inflation is another area where there are signs of improvement. Some of the biggest rises have been for household staples. Milk, for example, has gone up 27% this year, so it is significant that many of the biggest supermarkets have just announced price reductions.
Now, I’m not going to pretend that this means we are about to enter a boom market. Prices are holding steady rather than increasing but, overall, the market is looking a lot healthier than it has for a while. Zoopla has gone as far as to claim the market is in better balance than it has been for more than 3 years.
The rental market, in contrast, is becoming ever more imbalanced, with rents continuing their inexorable rise. In the National article this month, there are some figures from Zoopla that perfectly illustrate the problem - over the last five years, demand for rental property has risen by 46% and supply has fallen by 38%.
And the blame for that imbalance lies squarely at the government’s door. For years, instead of dealing with the core issue – the lack of new housing – they have blamed landlords, hitting them with punitive taxes and legislation, resulting in significant numbers selling up. Michael Gove’s latest proposal to regulate the holiday let market appears to be finally generating some serious debate in both the press and amongst MPs themselves about the government’s anti-business approach to the housing market and their serious policy failures. With an election coming up, they are unlikely to do anything too radical, but whoever forms the next government will need to give housing their urgent attention.
On that note, I hope you enjoy the bank holidays and I’ll be back to give you another update next month.