The Autumn Budget came and went last month with no new announcements impacting the property market. This is a both a disappointment, and a relief.
We reported in October that the Chancellor appeared to be considering tax breaks for landlords who sell their investment property to their long-term tenant. Whilst generous, this would most likely have caused long-term damage to the private rented sector and would not have been universally available to landlords or tenants. Thankfully, there was no such announcement.
However, despite calls from across the market we also didn’t see any changes to mortgage interest tax relief for landlords, nor did we see any amendment to Stamp Duty Land Tax across any part of the property market, which we feel was a missed opportunity to give a boost to the property market.
Meanwhile, earlier this month the Monetary Policy Committee voted to keep the Bank of England base rate at 0.75%, which was welcome news for those who have variable rate mortgages. The Governor did hint that interest rates are likely to remain at this rate until the middle of 2019, provided the UK has an orderly exit from the EU.
So, in the absence of any significant change to housing policy the market trends we’ve witnessed since the start of the year have followed a largely predictable pattern. Recent figures from the Office for National Statistics revealed that house prices increased by 3.5% in the year to September 2018, which is stronger growth versus the previous month.
The average house price in the UK was £223,000 which is £8,000 higher than the same time last year. Meanwhile, rents are continuing to rise. According to the HomeLet Rental Index rents in the UK rose 2.1% in October versus the same month a year ago, and now stand at £928 per month.
Despite initiatives to encourage home-ownership, private landlords continue to provide homes for millions of households. However, as many landlords are choosing not to increase their portfolio until current market uncertainty has passed, then demand will undoubtedly outstrip supply which is only likely to see rents continue to rise.