{"id":100164,"date":"2024-12-22T11:40:00","date_gmt":"2024-12-22T11:40:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=100164"},"modified":"2024-12-22T11:16:18","modified_gmt":"2024-12-22T11:16:18","slug":"house-buyers-face-affordability-hurdles","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/house-buyers-face-affordability-hurdles\/","title":{"rendered":"House market shifts as landlords face pressures and tenants gain leverage"},"content":{"rendered":"\n

In 2024, the housing market<\/strong> has exhibited unexpected stability after years of volatility. Although affordability concerns still exist for both first-time buyers and renters, rising salaries and better lending conditions are boosting optimism for 2025.<\/p>\n\n\n\n

Wage Growth and Interest Rates Drive Resilience<\/strong><\/h2>\n\n\n\n

Strong wage growth and declining interest rates are underpinning the stability of the housing market<\/a>. October’s wage growth reached 5.2%<\/strong>, offering some financial relief for households. Additionally, the Bank of England<\/a>\u2019s interest rate cuts in 2024, reducing the rate to 4.75%,<\/strong> have slightly eased mortgage pressures.<\/p>\n\n\n\n

Robert Gardner, Nationwide\u2019s chief economist, expresses cautious optimism. \u201cLower interest rates<\/strong> will help, and income growth outpacing house price growth<\/strong> will also help. But it\u2019s going to take time for that process to have much of an effect,\u201d he explained.<\/p>\n\n\n\n

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UK houses forcasted to grow<\/figcaption><\/figure>\n<\/figure>\n\n\n\n

However, fixed mortgage rates remain a challenge, with average two-year and five-year deals hovering around 5.46% <\/strong>and 5.23%<\/strong>, respectively. Sub-4%<\/strong> mortgage deals, seen briefly in late 2024, have become scarce. Market analysts predict sporadic appearances of such rates in early 2025<\/strong> but warn against expecting widespread availability.<\/p>\n\n\n\n

Tom Bill, head of UK residential research at the upmarket estate agent Knight Frank, said : \u201cWe\u2019re firmly back above 4% for anything that\u2019s a two- or five-year fix. You have a certain amount of people that need to move because of schools and jobs. But when mortgages dip below 4%, you start to see more discretionary demand kick in, and that will be slower to come back.\u201d<\/p>\n\n\n\n

Shifts in the Rental Market Amid Landlord Pressures<\/strong><\/h2>\n\n\n\n

While house prices show resilience, the rental market is poised for a different trend in 2025. After years of steep increases, with rents rising by 9.1%<\/strong> in 2024 according to the ONS, growth is expected to slow to around 4%. Mounting financial strain on tenants and increasing property availability contribute to this moderation.<\/p>\n\n\n\n

Many renters, whose housing costs now average 40% of their incomes, are negotiating lower prices. Simultaneously, some landlords<\/strong> may exit the market, driven by new renters’ rights legislation, declining rental profitability, and rising operational costs. This trend is reshaping the market, as tenants gain leverage while landlords face mounting challenges in maintaining competitive pricing.<\/p>\n\n\n\n

The estate agent Chestertons noted a shift in market dynamics: \u201cWith average rents now close to 40% of incomes, many tenants are struggling to absorb further cost increases<\/strong>, despite rising wages. This has resulted in fewer people entering the market and more renters negotiating lower prices.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Despite experts’ predictions of continuous price growth through 2025, the UK housing market continues to confound expectations. Despite issues with affordability, a robust market is shown by robust pay gains and declining borrowing rates.<\/p>\n","protected":false},"author":10,"featured_media":100166,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-100164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/100164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=100164"}],"version-history":[{"count":5,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/100164\/revisions"}],"predecessor-version":[{"id":100190,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/100164\/revisions\/100190"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/100166"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=100164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=100164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=100164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}