How to make the most from the current housing market

To understand how to make the most of the housing market, we take a deeper dive into the current property market.

Buyers, sellers, investors, and landlords may be mostly interested in whether investing in the property and rental market is still worth it, and if you consider the long-term growth in property values experienced in recent years, the data, as discussed below, looks promising.

The property market may seem like an uncertain place right now, which is why we’re here to give you the facts and tell you what’s what.

What’s happening in the property market right now?

Following the usual seasonal fluctuations, September has given asking prices a little boost and a flurry of activity, as the UK’s average asking price increased by 0.4% (£366,281) and the number of new properties coming on the market increased by 12%.*** First-time buyers continue to be one of the best performing sectors with the most sales agreed, but still 13% lower than the more normal 2019 market. This increased activity is also reflected in the Halifax house price index for September, that reported average house prices fell by less this month (-0.4%) than in August (-1.8%).***

At a more local level, you'll find relatively consistent trends in monthly asking price changes across most regions. The South West saw the greatest monthly change with a +1.7% (reaching £390,688), while the North East saw the largest monthly decrease of -0.8%, meaning average asking prices for September are £184,568.*** Wales experienced a 1.1% monthly growth in asking price, and a 0.1% increase in annual asking price, meaning that the average Welsh asking price is £259,898. In Scotland, monthly asking prices decreased slightly by -0.1%, but saw a 2.6% increase in average annual asking price, reaching £190,176.***

Is it too late to sell my house at the price that I want?

Whether you’re looking to sell in England, Wales or Scotland, reading about the house prices dropping in the headlines, might not be the most encouraging news you’d want to see. However, keep in mind that this type of fear-mongering press doesn’t take the wider picture into account. Yes, house price growth is slowing, but it’s a reflection of the correction needed to balance out the incredible price growth we experienced over the post pandemic years, making this time as good a time as any to choose to sell.

At this point, the market offers sellers a great opportunity to make the most of anyone who is serious about moving, and a good agency will help you market your property in the right way. Tim Bannister, Rightmove’s Director of Property Services, provides great insight into the current situation: “Plenty of sales are being agreed for properties that are priced at the right level, and those that are selling are still taking five days less than at this time in 2019. We’re also seeing the number of fall-throughs decline as market conditions and mortgage rates stabilise.”***

Additionally, although the majority of buyers will have a mortgage, it’s worth remembering that there are still many cash buyers looking to buy their first or next property.

Am I at risk of negative equity if I sell now?

Negative equity rarely occurs and only happens when the owner of a property owes the mortgage lender more than the property is worth.

To answer this question, we need to take a look back over the previous years, in which we experienced record-high house prices. For example, when comparing current prices to previous years, they are currently £39,400 higher than in March 2020, and asking prices are also 20% higher than in 2019.***

So, how do I know if it’s a good time to sell?

As every seller’s circumstances will vary, it’s important that you do your own research, as well as talking to your local property experts, who will be able to advise you more accurately and will take your needs into account. Get an expert valuation and compare this to similar and local properties and consider how this matches up to your expectations and your needs.

Is now a good time to buy?

Looking at the latest UK house price data from the HM Land Registry, annual house price inflation from July 2022 to July 2023 was 0.6%, down from 1.9% in June 2023 – making this look increasingly like a buyer’s market. In England, the average house prices in July 2023 were £309,000 (a yearly increase of 0.6%), Scotland's house prices were £192,000 (+0.1% year-on-year) and Wales saw a yearly house price slow down of -0.1%, reaching £216,000.*

Interest rates will most likely be part of the deciding factor in whether or when you buy. At the time of writing, rates are currently between 5-7%, varying depending on the provider and the amount you apply for.**

Thinking about buying in Scotland?

Although the Scottish housing market operates slightly differently to English and Welsh markets, house price growth has also slowed somewhat, though not as significantly as in England. The Land Registry reported that in the 12 months to July 2023, there has been little change, 0.1% to be precise, with average house prices reaching £192,000. Simply looking at these numbers, like England and Wales, it paints an encouraging picture for anyone looking to buy.

So, if you’re thinking about buying, take advantage of the current market, as it offers you a great opportunity to either get on the property ladder, upsize or downsize.

Is investing in property still a good idea?

Landlords, in particular, may be asking themselves this question in relation to their buy-to-let properties and if rental properties are still a good idea. So to help answer this, we’ll first run through some key facts you need to know about.

Across the UK, average rents are still increasing, reaching £1,276 pcm, and when excluding London, average rents currently are £1,061 pcm. This means that rents are up by 10.09% and 9.27%, respectively, compared to the same time last year.***

Looking at the various regions, you won't be surprised to find that London remains to be the most expensive area to rent, with an average of £2,179 pcm. The North East is the cheapest with £668 pcm, but having experienced a 1.98% year-on-year price growth.*** Scotland has seen the first decrease in rental growth this year since January (-0.81%), after continuously experiencing record growth for new lets. However, average rents in Scotland now still 13.3% higher than the same time last year, reaching an average of £977.*** Wales has seen a year-on-year growth of 7.3%, a monthly increase of 1.2%, meaning that average rents are now £852.***

Additionally, the latest Zoopla Rental Market Report stated that the current annual rental inflation for new lets lies at 10.5%, with Scotland leading the way with the strongest rental growth of 12.7%.^ The current high demand (51% higher than the 5-year average) and low supply of rental stock (30% lower than the 5-year average) places much upward pressure on rents – a trend that is present across all UK regions.^

Although affordability may dampen some of the rental growth, it should not deter investors and landlords from investing in the rental market. Especially, as in August, Paragon Bank reported that 91% of outer-London landlords, and that 67% of landlords across Britain, have reported an increase in demand.† This further supports the fact that demand for rental properties is high, with little to no signs of slowing down.

Whether you’re thinking of investing in Scotland, Wales or England, we can help you on your investment journey . Why not check out our other blogs to discover rental hotspots near you? Browse articles.