UK property market strengthens, but renters face tighter squeeze – business live | Business


Introduction: UK property market strengthens, but renters face more pressure

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK housing market is continuing to pick up, the nation’s surveyors have reported, but renters are being squeezed by a fall in properties available to them.

The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey has shown that UK house price growth turned positive across the country for the first time in almost two years.

More surveyors reported rising house prices in their area than falling prices in September, which ends a run of negative or flat returns for this indicator stretching back to October 2022.

RICS reports that most parts of the UK are experiencing rising house prices, although the West Midlands, South West and East Anglia are lagging behind.

With borrowing costs expected to keep falling, prices are expected to rise across the UK in the year ahead.

A chart showing UK house price forecasts
Photograph: RICS

Surveyors also reported that demand for homes, sales, and new listings all returned to growth last month.

RICS head of market analytics, Tarrant Parsons, says:

“The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand.

“Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward. In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near-term and over the next twelve months.”

But renting a house in the UK is becoming harder, as demand continues to grow and outstrip supply.

RICS reports that demand from tenants increased again last month, while there was a drop in the number of properties listed for rent – possibly because landlords are fearful of capital gains tax (CGT) changes in the budget this month.

The group explains::

This trend is further influenced by some landlords listing their properties for sale before potential CGT rises. Unfortunately for renters, the continuing squeeze on supply will likely mean further rent rises and difficulties finding property.

The struggle to rent property has already led to a rise in rough sleeping last year. Homelessness charities warned yesterday that rough sleeping will head back towards record levels unless the government addresses a looming £1bn shortfall in frontline funding.

The agenda

  • 9.30am BST: Bank of England’s credit conditions survey

  • 10am BST: Post Office chief executive, Nick Read, to give evidence at the Horizon IT inquiry for the second day

  • 1.30pm BST: US inflation report for September

Share

Updated at 

Key events

Everyone will be better off under the new Government, the Business Secretary has said, rejecting the suggestion pensioners would have to “hide behind the sofa” when the Budget was announced.

Asked whether it was fair to say pensioners would have to “hide behind the sofa wrapped in a blanket” on October 30, Jonathan Reynolds told Sky News:

“This is a Government that is going to make everybody better off.

Specifically for pensioners, we already have the commitment to the triple lock, that’s a guarantee that pensioners will be better off this year, next year, the year after that.

That is a significant pledge from this new Government, so people should be reassured from commitments like that.

Yes, it is a challenging situation, but we are serious on delivering on our objectives, which is an economy that works better for everyone, better growth, better investment and to make sure everyone benefits from that.”

Share

Rachel Reeves has also been warned that she risks a Liz Truss-style meltdown if the City responded badly to substantially higher borrowing in the budget later this month.

Ben Nabarro, chief UK economist at Citi, said there was a risk of a “buyer’s strike”(a run on government bonds) unless Reeves made it clear any increase in investment spending would be gradual.

Nabarro (whose economic forecasts underpin the IFS’s latest projections), said:

“There is material concern in the gilt market about an unconstrained dash for investment out there…

International investors are not really giving the gilt market the benefit of the doubt.

IFS says Reeves has to raise taxes by £25b at the budget

Spending has to increase by £30b to avoid austerity

And Citi warns gilts risk a “buyers’ strike” fiscal rules are relaxed too far to borrow tens of billions for investment

Via @tomelleryreeshttps://t.co/5g6GDGrD5n

— Alex Wickham (@alexwickham) October 10, 2024

Share

IFS: Labour needs £25bn a year in tax rises to avoid austerity

Chancellor Rachel Reeves needs to make £25bn of tax rises to avoid breaking Labour’s pledge not to return to austerity, the Institute for Fiscal Studies is warning this morning.

The IFS has calculated that taxes would need to rise substantially even if Reeves changes the UK’s debt rules to allow extra investment spending.

NEW: The decisions made at this month’s Budget could shape domestic policy for the whole parliament to come.

Our IFS Green Budget report launching today, funded by @NuffieldFound and @citi, examines the fiscal situation and options for the Chancellor: https://t.co/ev5r12WLqY

— Institute for Fiscal Studies (@TheIFS) October 10, 2024

In the run-up to the election, Labour outlined plans for £9bn of tax increases, but the IFS said that if Reeves wanted to increase spending on public services in line with national income she would need to raise a further £16bn to meet her rule that day-to-day spending should be covered by tax receipts.

The thinktank says:

“Given the pledges she has made not to raise the main rates of income tax and corporation tax, or to increase national insurance or VAT at all, she might struggle to implement a tax rise on that scale.

“It would be bigger than the net tax rises implemented in July 1997 and October 2010 (both around £13bn-£14bn). In which case she might have to live with day-to-day spending on many public services falling as a fraction of national income.”

Share

Updated at 

Rents expected to keep rising

The shortage of rental properties means most surveyors expect rents to keep rising, as this chart shows:

A chart showing forecasts for UK rental growth Illustration: RICS

The government’s renters’ rights bill will ban competitive bidding in the housing market, by preventing property owners accepting more rent than they have asked for.

We are changing renting for the better. 

Here are just some the of changes the Bill will introduce:   

➡️ Ending no-fault evictions  

➡️ Banning bidding wars  

➡️ Improving safety  

➡️ Giving the right to request a pet   #RentersRights pic.twitter.com/zdl4Ahniyl

— Ministry of Housing, Communities & Local Gov (@mhclg) October 9, 2024

RICS president Tina Paillet says:

“While the Renter’s Rights Bill aims to improve standards and offer better protections for tenants, we must ensure that these reforms do not discourage responsible landlords from remaining in the market.”

“Most importantly, the planned changes in the private rental sector fall short of tackling the core issue: increasing supply and making housing more affordable for tenants.”

For those renting, stock levels continued to reduce in September 2024 as some landlords hoping to avoid any potential CGT increase look for a quick completion before budget day. Should the Gov follow through with a delayed start date, expect more stock to hit the shelves and… pic.twitter.com/MEGkFyNvSt

— Emma Fildes (@emmafildes) October 10, 2024

Share

Introduction: UK property market strengthens, but renters face more pressure

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The UK housing market is continuing to pick up, the nation’s surveyors have reported, but renters are being squeezed by a fall in properties available to them.

The latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey has shown that UK house price growth turned positive across the country for the first time in almost two years.

More surveyors reported rising house prices in their area than falling prices in September, which ends a run of negative or flat returns for this indicator stretching back to October 2022.

RICS reports that most parts of the UK are experiencing rising house prices, although the West Midlands, South West and East Anglia are lagging behind.

With borrowing costs expected to keep falling, prices are expected to rise across the UK in the year ahead.

Photograph: RICS

Surveyors also reported that demand for homes, sales, and new listings all returned to growth last month.

RICS head of market analytics, Tarrant Parsons, says:

“The latest survey results once again convey a brighter picture for housing market activity, with the recent easing in mortgage interest rates continuing to support a recovery in buyer demand.

“Critical for the outlook, a further unwinding in monetary policy is anticipated over the months ahead, which should create a more favourable backdrop for the market moving forward. In keeping with this idea, forward-looking sentiment data from the survey points to sales volumes gaining impetus, both in the near-term and over the next twelve months.”

But renting a house in the UK is becoming harder, as demand continues to grow and outstrip supply.

RICS reports that demand from tenants increased again last month, while there was a drop in the number of properties listed for rent – possibly because landlords are fearful of capital gains tax (CGT) changes in the budget this month.

The group explains::

This trend is further influenced by some landlords listing their properties for sale before potential CGT rises. Unfortunately for renters, the continuing squeeze on supply will likely mean further rent rises and difficulties finding property.

The struggle to rent property has already led to a rise in rough sleeping last year. Homelessness charities warned yesterday that rough sleeping will head back towards record levels unless the government addresses a looming £1bn shortfall in frontline funding.

The agenda

  • 9.30am BST: Bank of England’s credit conditions survey

  • 10am BST: Post Office chief executive, Nick Read, to give evidence at the Horizon IT inquiry for the second day

  • 1.30pm BST: US inflation report for September

Share

Updated at 





Source link

Leave a Reply

Back To Top