Date Published 25 April 2022
Spring has sprung, the daffodils have been and gone signalling the first quarter of 2022 is in the rear-view mirror – 'what a difficult market!' are the cries heard from those looking for rental properties.
The lettings market has seen a 64.6%* deficit (*Lonres Data 2022) in property availability from 2021 and with the ever-on-going surge in demand, record prices are being seen with achieved rental values rising by 27.1% compared to the same period last year with the Retail Price Index (RPI) being 9%, the highest seen since 1991. One would, perhaps, expect Landlords to be serving notice on their current Tenants in order to remarket at vastly inflated figures and consequently witness a surge of stock. However, in truth, Landlords have realised that by agreeing to a smaller rental increase they are, firstly, averting void periods and, secondly, retaining the Tenants that they know (they pay their rent on time and look after the property), 'Better the Devil you know!'.
The sales market has however seen signs of seasonal improvement with this traditionally being a busier time of year. Pricing does seem to be a decisive element in most cases, with over 40% of available properties having price reduction in Q1 of 2022. However, there is still a shortfall of 11% on available properties when comparing to Q1 2021.
The Bank of England has raised interest rates for a second time in a row (0.75% at time of writing) and we are seeing an unprecedented rise in the cost of living.
This economic uncertainty will not affect the market in the short term as this is predominantly driven by more affluent households who are able to cope with the increase in outgoings. However, as we move through 2022, the longer term effects will be felt as these economic actions will limit price growth and we may see a dip in transaction levels. First time buyers will also be affected as they have to juggle increasing rental values whilst trying to save for their deposit.
Ashdown Marks are a firm who remain confident and optimistic as London has been and will always be seen as a safe and stable market to invest in.
