We are in the final month of Q3 2023 and the market continues to develop. The pattern of slowing house price growth is still ongoing, but rents are once more providing a brighter outlook. Future forecasts still look positive for both investors and homebuyers looking at the longer term rather than short-term gains.
For September 2023, we have gathered some especially interesting data and opinions on the market to bring you our monthly update. Read on to find out more…
House prices fall
The story dominating the new is falling house prices. Nationwide reports an annual decrease of 5.3% and a monthly fall of 0.8%. These seem like large drops, but context is required. Last August was the historic peak for house prices so it is not a surprise that they might fall slightly again. In total, they have fallen to the level seen in December 2021, which is still 20% higher than the five-year average.
What does this mean for buyers? The first consideration is that if you are a cash buyer there may not have been a better opportunity for some time. Prices are falling and the decreasing activity in the market means that some sellers are dropping prices further than they would have liked. If you are in a position to buy without a mortgage, you can get the best of both worlds – lower prices while avoiding the higher mortgage rates.
If you are buying with a mortgage, the case for buying property off-plan is stronger than ever. You can make the most of lower prices now and complete your purchase later when construction is finished and mortgage rates are projected to be back to normal.
Interested in buying UK off-plan property? Click here to see our available opportunities today.
Rental market keeps on growing
In contrast to reports of house prices falling, rents in the UK keep going up. Fewer people buying homes means that more people are renting for longer, pushing up demand and prices in the sector. Consequently, the Office for National Statistics reported in the last month that rents are at their highest level since 2016.
The latest data from Zoopla shows that rental growth in the UK accelerated to 10.5% year-on-year in the latest month they have data for. Rents were up in every region of the UK except for Scotland, and more is expected to come in the future.
HomeLet reports that the average rent is now up to £1,051 pcm across the UK when London is excluded – a 1.4% increase over the July figure. In London, the average rent has gone up to £2,145 pcm and the capital remains the most expensive place in the UK to rent.
Manchester property market continues to stand out
That rental growth is spread across the UK, but once again we can look to Manchester for some of the most impressive rent rises in the UK.
The latest market analysis from Alliance City Living shows that rents are surging in the city and that any talk of a potential slowdown is premature. In particular demand are city centre luxury apartments which are seeing higher rent increases than ever. When looked at year-on-year, the data shows the following averages:
- Studios - £922 pcm (+12%)
- One-beds - £1,151 pcm (+15%)
- Two-beds - £1,537 pcm (+9%)
- Three-beds - £2,213 (+7%)
Availability is lower than pre-pandemic levels thanks to the number of people in the rental market as mentioned previously. Until this changes, rents in Manchester will keep growing – but the overall lack of supply coming into the market makes any major change unlikely.
Luxury city centre apartment buildings like Vision and Berkeley Square which have an extremely high specification and are walking distance to everything will be the beneficiaries of this and are sure to become the most popular homes in the city.
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