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Categories: government and politics | buy to let mortgages
According to Rightmove’s latest data, there has been a 1.9 percent drop in asking prices for properties this month. Does this offer opportunity for landlord investors?
Based on the latest data from Rightmove, the average initial price for newly listed properties has fallen by 1.9 percent this month, now standing at £364,895. This decline is the most significant during this time of year since 2018, surpassing the typical 0.9 percent decrease seen in August's traditional summer slump.
Factors influencing this are the cost of living crisis, typically slow summers, and the highest Bank of England Base Rate since 2008. So, the notably larger drop in prices for this month suggests that some sellers are taking proactive measures to sell, by pricing their properties more flexibly.
Opportunity for landlords?
Some landlord investors have been waiting for property prices to cool. This drop in asking prices may be the opportunity they have been waiting for, to secure properties at better value for money.
The average requested prices are now £8,000 (equivalent to 2 percent) lower, compared to their peak in May. However, this should be viewed within the broader context of substantial price growth over the past four years.
The combination of reduced asking prices and higher average earnings could also represent cautious steps toward enhancing buyer affordability, but residential homebuyers still face challenges that landlords may not.
Rightmove’s Director of Property Science, Tim Bannister, had this to say:
There are still significant challenges in saving up enough for a deposit and affording higher mortgage payments, however would-be buyers are now likely to see greater property choice in their area and therefore a home more likely to suit their needs compared to during the pandemic.
But while there is more choice there is no glut of properties for sale, with the number of available properties still lower than at this time in 2019 and homes still selling more quickly, with the average time to find a buyer now 55 days compared to 61 days in 2019. While a 1.9% drop in just one month seems dramatic, it’s in part an expected seasonal drop as sellers coming to market realise that they have to compromise on price due to the traditionally quieter summer holiday period.
While Tim Bannister is discussing the affordability pressures for first-time buyers and those moving home, landlords may find themselves in a slightly better position to take advantage of the slight fall in asking prices.
With more capital, and without the need to relocate to the property, landlords will be able to bid on a wider range of properties.
Additionally, as the property would only be a business decision, landlords would most likely be able to effectively negotiate better deals – capitalising on the current market’s more flexible asking prices.
Commercial Trust can help with securing a mortgage.
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If you are considering an investment in property, or have an upcoming renewal, enquire today, and get talking to our expert advisors on the phone for immediate help and a product recommendation.
