The Autumn Statement: What It Means for the Housing Market
Posted on 6th December 2022
In this blog post, we are going to take a look at the Autumn Statement from the British Government which was released in late 2022.
This statement had a huge impact on the housing market and we are going to discuss what it means for both buyers and sellers in the property market. We will also take a look at how much money people will need to buy an average house in different parts of the UK and how this compares to mortgage costs from over the last decade.
Finally, we will give our opinion on where the Leicester housing market is heading in 2023 – both for sales and rentals.
The Autumn Statement
The Autumn Statement of 2022 had an immediate impact on the property market. It was announced that the stamp duty holiday for first time buyers would be extended until March 2023 and the stamp duty tax for second home buyers would be increased.
This was done in response to the mini-budget announced just a few weeks earlier which cost Liz Truss her job as Prime Minister!
The worry for the whole of the country was that the housing market could be in for a sharp downturn, as prices had been steadily rising over the past few years.
The good news is that in the short term, house prices have been pretty resilient. The average price for a property in the UK is still around £250,000 and mortgage rates are still fairly low, compared to what they were a 15 years ago.
This means that while buying a house will still be expensive, it will be doable for most people, but it is just going to be a lot different to buy a house now than it has been for the last 10 years or so.
Rents have been higher than mortgage payments for the same house over the last 10 years and this is now looking it is going to change, as mortgage lenders have been increasing rates fairly quickly over the last few weeks in response to the Autumn Statement.
Selling a house in this market
For house-sellers, this could be a worrying time but we need to put things into perspective, as this is still a sellers' market. Prices are still higher than they were before 2015 and there will be plenty of people who want to buy in the market.
The Autumn Statement has had an effect on the sales market, and it could mean that people are more cautious when buying a house but as we move into January, when the market normally starts "forming" for the year ahead, we expect people to start to understand that this market is here to stay and for the sales market to continue to be stronger in the Spring than it currently is, albeit prices may be lower than they have been throughout the last 2-3 years, this is to be expected with the higher interest rates that people are dealing with now, and along with the cost of stamp duty, it can make buying a property more expensive than it used to be.
What's happening with the rental market?
The rental market in Leicester is another story altogether.
Rents have been rising heavily since the beginning of 2021 and landlords have struggled to keep up with all the new legislation which keeps being introduced from the government.
It is really hard for landlords to manage their properties in this market and with the ever-increasing rents, it could be a worrying time for tenants as well, as they struggle to find a place that is affordable.
However, there are lots of people looking to rent in the area, so it is still a good time for landlords to rent their property out.
Overall, the Autumn Statement of 2022 has had an impact on the housing market, and it is likely that we will see a slight shift in the market as we move into 2023.
Prices may be lower than they were in 2021 and mortgage interest rates may be higher, but the market is still strong and it is still possible to find a good house for sale or rent in Leicester.
With more and more Government legislation coming in all the time, landlords and buyers need to be aware of their rights and what they can and cannot do in their respective markets.
The housing market is ever-changing and the Autumn Statement of 2022 has certainly changed it again, but with a bit of knowledge, people should be able to find what they need in the market over the coming months.
Here are some key tips if you are looking to sell a property in this unusual market.
1. Look to have a realistic price point for your property
2. Make sure your property is clean and in good condition
3. Marketing is key – make sure you use excellent photos and get as many people as possible to view the property as possible
4. Be prepared to negotiate with potential buyers
5. Have all your paperwork in order
And here are some helpful hints if you are looking to buy in the current market.
1. Have a realistic budget in mind
2. Make sure you are pre-approved for a mortgage
3. Be prepared to negotiate with the seller
4. Have all your paperwork in order
5. Get a solicitor who understands the current housing market
And lastly, some handy advice for landlords who are trying to deal with the raft of legislation changes.
1. Stay up to date with all the latest changes in legislation
2. Make sure you have a good understanding of what each change means for your business
3. Speak to an accountant or solicitor who can help advise you on how best to move forward with your property business
4. Keep records of everything – rent payments, repairs and maintenance, etc
5. Try and be as flexible as possible with your tenants – this will help keep them happy and may stop them from moving elsewhere
Using a letting agent can be helpful for landlords who are trying to keep up with all of the new legislation that is being introduced.
A letting agent will stay up to date with all the changes, and they will be able to help advise landlords on how best to move forward with their property business.
Letting agents can also handle all of the paperwork for landlords, which can be helpful when trying to keep track of everything.
Overall, using a letting agent can make things easier for landlords who are struggling to keep up with all the changes in legislation.
There are three main things that we have discussed in this blog post.
Firstly, we looked at how the Autumn Statement of 2022 has impacted the housing market.
Secondly, we looked at the current state of the housing market in Leicester – both the sales and rental markets.
And lastly, we gave some advice to landlords who are struggling to keep up with all the new legislation changes.
To summarise, the current state of the Leicester housing market is good for landlords as rents continue to increase, but it may be harder for tenants to find an affordable property.
The Autumn Statement of 2022 has had a significant impact on the housing market, and it is likely that prices will be lower than they were in 2021 and mortgage interest rates will be higher.
Landlords need to stay up to date with all the latest changes in legislation if they want to make sure they are compliant with Government rules.
Using a letting agent can be helpful for landlords who are struggling to keep up with everything that is changing in this rapidly-evolving industry.
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