News
Property prices expected to rise by 2 percent this year
By Ted Healy of DNG TED HEALY
It's that time of year again where property reports on the year past are plentiful, with financial institutions, agencies and construction firms all analysing the past 12 month's activity and making predictions for the year ahead.
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The latest report, from the Society of Chartered Surveyors (SCSI) has highlighted that in the final quarter of 2022, 40% of house sales were due to landlords exiting the market.
It suggests property prices are expected to rise by 2 percent this year, a considerable slowdown on the double-digit growth rates up to now which is likely to put a squeeze on house builders because construction costs are rising at more than 2 percent. This will directly impact on supply to the market.
The large numbers of buy-to-let properties being sold will not be replaced in the rental market, putting more pressure on rental costs.
The survey found that popular new three-bed semis remain out of the reach for a large number of first-time buyers on average salaries.
The trend of second-hand buy-to-let properties coming on the market was evident throughout 2022, but it ramped up in the last quarter of the year. While this may have helped to increase the number of properties available for sale – 66% of agents reported low stock levels this year – the lack of supply remains the dominant issue in the market.
The trend of private landlords exiting the market also has serious implications for the supply of rental properties. SCSI agents are reporting that the supply of available units to rent is at one of the lowest levels ever, and they do not believe the situation will improve in the short term.
“Almost 80% of agents surveyed are of the view that individual buy-to-let second-hand rental units being sold at present will not be replaced in the rental market in the next two years,” said John O’Sullivan of SCSI.
The survey found the three primary reasons for occupied residential units coming back on to the market for sale include the complex and restrictive nature of rent regulations, landlords finding compliance with rented housing standards too onerous, and net rental returns too low, according to the report.
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