Issue 151

3
Rents hit 15th consecutive record
Meanwhile, the average advertised rent for new properties on the rental market has
hit another new national record of £1,278 per calendar month outside of London.
This is the 15th consecutive quarter that average advertised rents have risen to a new
record, with average rents now 10% higher than this time last year.
The average advertised rent in London has also risen to a new record of £2,627 pcm,
and is now 12.1% higher than last year.
Tim Bannister concludes: “Record rents and far more tenants looking to move
than there are homes available means it will still feel very difficult for many tenants
navigating the market.
“However, there are signs that some of the pressure between supply and demand is
beginning to ease, with the number of new rental properties coming to the market
now at its highest level since the end of last year.
“While it is likely that there is some way to go before this filters through to rental
prices if the improving trend between supply and demand continues, we could start
to see the pace of yearly rent rises slow more significantly than it has been.”
Rising levels of mortgage affordability sees
benefits trickling through to homebuyers
Homebuyers are already benefiting from cheaper mortgage rates as average monthly repayments for those
purchasing in September came in £64 less per month versus July of this year.
Research by specialist property lending experts, Octane Capital, analysed the cost of
a five-year fixed rate mortgage for those placing a 25% deposit on the current average
house price of £289,824 (July 2023 - latest available) and how this cost has changed
in recent months as a result of reducing mortgage rates.
The research shows that in July of this year, the average mortgage rate sat at 5.79%.
As a result, the full monthly repayment required by the nation’s homebuyers came in
at £1,373 per month, while the average payment for an interest-only mortgage was
£1,049.
In August, the average rate fell to 5.34%. This caused the average monthly mortgage
payment to fall to £1,314, or £967 for those making an interest-only payment.
By September, the average rate had fallen again to sit at 5.30%. As such, the average
monthly repayment was £1,309, or £960 for interest-only.
This means that those looking to purchase today are enjoying a cost saving of £64
per month compared to just a few months prior when making a full mortgage
repayment, climbing to a saving of £765 over the course of the year.
Those making an interest-only repayment are now saving £89 per month, or -£1,065
over the course of the year.
CEO of Octane Capital, Jonathan Samuels, commented: “After reaching
scary highs, and much industry discourse suggesting they would remain that way
for a long time, mortgage rates have started to fall over the past three months. This is
wonderful news for those coming to the end of a fixed term, who will welcome the
reduced stress on their household finances.
“For buyers, it means things are becoming more affordable which aligns nicely with
the upcoming autumn rush on the housing market. And sellers should be happy,
too, because cheaper borrowing means buyer demand should increase after many
postpone their property searches in fear of mortgage costs getting truly out of hand.
“We’re confident that, barring any major disasters or further governmental calamities,
rates will continue to drop, albeit slowly, between now and the start of the new year.”
www.thepropertydrop.co.uk
01600 717255
info@thepropertydrop.co.uk
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