Market insight Summer 2022
Aug 18, 2022
INTEREST RATE RISES LEAVE RENTING CHEAPER THAN BUYING
Many people would rather not rent, but must do so because setting aside sufficient money for a deposit is a struggle. But thousands of others – who have enough savings to buy a home of their own - prefer the tenant lifestyle.
The members of this group stand to benefit from the rising interest rates which are set to make renting a home cheaper than buying one. At the beginning of this year, it was cheaper to buy than rent in every region of the UK. But this is changing, as our new analysis shows.
For someone with a 5% deposit, it has almost always been cheaper to rent than buy because the cost of mortgage deals for such a borrower is higher.
OFF MARKET SALES CONTINUE TO SOAR
A record 23% of the London homes that changed hands in the first five months of 2022 were sold off-market, against 21% last year, according to the latest research from Hamptons. This highlights how this way of selling a property has spread beyond the smartest postcodes.
In the UK, 10% of homes - the highest since 2015 - were sold via this route. Previously it was a strategy employed mostly in the London luxe sector among homeowners keen to protect their privacy. Today 59% of off-market sales are outside the capital.
The key cause of this shift has been the shortage of stock. Increasingly buyers, keen to get ahead of the competition, have become willing to pay a premium for a home before it comes to market.
As a result of this eagerness, off-market sellers have been richly rewarded. The average off-market home achieved a record 99.5% of its asking price… read more.
TOP 10 SECOND HOME HOTSPOTS
While overall, the numbers of second home purchases have remained fairly flat, their concentration into 10-15 local authorities has steadily increased. The top 10 hotspots are spread throughout the country.
Across Great Britain during 2021 and 2022, 1.8% of all homes were sold as an additional residence, down from an average of 2% in 2020. Since 2021, Wales and the South East account for almost half of all second homes bought nationally. They also saw the highest proportion of second home purchases, with Wales leading the charge at 5.7%.
The South West had the highest share of second home purchases, accounting for just over a third of all the second homes bought (34%). Home to picturesque holiday locations such as Bath and Devon this lion’s share has steadily increased over time.
DOWNLOAD the full research report: Is the tide turning?