As we navigate our way through the second quarter of 2023, the UK property market is buzzing with activity. Whether you're a landlord or an investor, property has been consistently delivering impressive returns despite a backdrop of economic uncertainty. As the property letting experts built on 30 years of experience, we always want to keep our, landlords update with the current trends and developments. So, here's our comprehensive property market update for May 2023:
A positive outlook
The past year has been a rollercoaster for many sectors, including the property market, with the cost-of-living crisis affecting people's purchasing power and impacting house prices. However, the latest monthly House Price Index from Zoopla in April offers a silver lining.
Richard Donnell, Executive Director of Research at Zoopla, is optimistic for the future, stating, "The worst of the pricing adjustment in the housing market appears to be behind us, [and] transaction volumes continue to grow." This growth in transaction volumes is based on a consistent recovery in demand and a steady increase in new sales agreements.
Signs of demand
Following the Easter break, the demand for homes in 2023 has peaked, showing a 14% increase compared to pre-pandemic levels in 2019. Zoopla reports a 66% year-on-year increase in the number of homes on the market. This abundance of choice has led to a 6% increase in agreed sales, aligning with the five-year average.
While three-bedroom homes continue to be in high demand, interest has somewhat decreased to 40% in Q1 2023. Meanwhile, the demand for one- and two-bedroom apartments has seen a rise. This trend is particularly noticeable outside London, where the average asking price for a two-bedroom apartment is 29% lower than a three-bedroom house.
City centres like Manchester are witnessing a surge in demand for smaller properties typically seen in buildings like Oxygen, AXIS and Manhattan. As property lettings experts, we are finding that these units are perfectly suited for young professionals, couples, and small families, offering a reasonably priced option to rent. This demand persists despite a 4.7% year-on-year rise in Manchester's property prices, significantly higher than the national average of 3.0%.
Rising Tide of UK Rents
With house prices remaining out of reach for many due to the cost-of-living crisis and increasing mortgage rates, the private rented sector is becoming the preferred choice for many. This shift has fuelled competition and driven up prices across the UK. Rightmove reports that average monthly rents outside London hit a record £1,190 PCM in April 2023, with rents in the capital exceeding £2,500 for the first time.
Although there has been a 6% increase in available rental properties over the last year, it is still 46% lower than in 2019. This suggests that high rents are likely to persist, with a potential for further increases.
Tim Bannister, a director at Rightmove, said, “Although there are some early signs that the gap between supply and demand is starting to narrow a little, it will still feel very competitive for tenants trying to secure a home.”
The UK property market appears to be in a strong position, with the worst of the uncertainty behind us. House prices are stabilising, and a new growth cycle seems to be on the horizon, making this an opportune time for current and potential landlords.
Your Next Step with Alliance City Living
At Alliance City Living, we are the UK property managers equipped with the knowledge and experience to offer landlords an unmatched property management experience. Making the switch to Alliance City Living is a seamless process; our dedicated team is ready to assist you every step of the way. Discover how we can enhance your property management journey, and ensure you reap maximum benefits from the promising UK property market. To get started or learn more, reach out to our team today.