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Consumer Credit
Caution creeps into the property market
The housing market is showing worrying signs despite a relatively successful month in April
Sarah Coles Senior personal fi nance analyst, Hargreaves Lansdown
New buyer enquiries increased slightly in April – similar to the previous month. However, sales agreed have fl attened. Agents’ expectations of sales in the next 12 months have fallen for four consecutive months. Rental costs are set to rise, as tenant demand keeps increasing and the number of available properties falls. Caution crept into the property market in
April, as buyers, sellers and lenders started to get more uneasy about the future. Some agents reported that they were having
to do an awful lot of legwork for sales, as prospective buyers took their time making a
One agent in the report said buyers were starting to struggle to get mortgages, and that lenders were uncomfortable with the immediate outlook for the market. There is also a good chance that they have changed their aff ordability criteria
decision. Several of them said that buyers and sellers were getting increasingly cautious, and one said that every single buyer now asks just how much longer price rises can continue. Meanwhile, one agent in the report said
buyers were starting to struggle to get mortgages, and that lenders were uncomfortable with the immediate outlook for the market. There is also a good chance that they have changed their aff ordability criteria to take account of rising costs, which is making it more diffi cult for people to stretch themselves. Another agent said this is causing some chains to fall apart, as mortgage companies do not think properties are worth their asking price. However, the number of properties going
up for sale has dropped again, which is going to keep prices rising. Almost every agent complained that they did not have enough homes on their books. It means that we can expect sales to ease off and price rises to slow rather than anything more seismic. For renters, life is going to get even more
expensive. They already spend a signifi cantly larger chunk of their income on housing costs than their home-owning counterparts, and rising rents are going to put them under even more pressure. Against the backdrop of soaring bills, this could force more renters to downsize over the coming months. Landlords continue to sell up in order to capitalise on higher house prices, so there are fewer properties left for the growing number of tenants. One agent said they had around ten enquiries for every property that becomes available. It means remaining landlords can continue pushing up rents, causing even more headaches for tenants. CCR
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www.CCRMagazine.com May 2022
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