While the past year has been defined by challenging economic conditions — leading to a significant amount of negative speculation where the UK property market is concerned — we’ve seen endless predictions of house price crashes, and that the BTL market will experience an exodus of landlords.
Last week, however, has delivered some much-needed positivity with the latest data from the Office for National Statistics showing inflation fell from 8.7% to 7.9% — a much more significant drop than economists had predicted (8.2%).
Inflation falling at greater pace is vitally important — it will be felt in people’s pockets, of course — but it will also relieve some tension within the Bank of England’s (BoE) Monetary Policy Committee (MPC), which next meets on 3rd August to discuss interest rates, with the inflation data having an immediate impact on what the markets are now expecting from this meeting.
The inflation update was just one positive news story from recent days.
Within the space of 48 hours, Rightmove released data showing buyer demand was holding strong and that the average asking price for a property coming onto the UK market is currently 2.6% higher than it was in January.
Meanwhile, a survey of landlords revealed that the majority (64%) have no intention of selling any of their BTL properties over the next year.
It is a timely reminder that speculation is just that: speculation.
At MFS we have seen a disconnect between many of the doom-and-gloom headlines, and the sentiment of property buyers, investors, and landlords.
The economic conditions are undoubtedly challenging but the resilience of real estate investment is plain to see, and while price growth has slowed somewhat, it is important not to allow negative predictions to cloud the actual sentiments of those active in the market.
Some landlords are undoubtedly looking to sell some of their stock, but this is the case every year as investors change their strategies or retire; this will create opportunities for other investors who are on the hunt for a BTL property.
BTL investors and their brokers will still need a great deal of support from lenders in the current economic climate.
They will need speed to fend off competition from other buyers; flexibility in the terms, repayment options and exit strategies for the loans; and optionality in finding the right product to match their circumstances.
Buyer demand is evidently still there, and economic markers are beginning to show there is light at the end of the tunnel for the cost of living crisis.
Now it is for lenders and brokers to collaborate, to deliver the right support to those looking to seize new opportunities in the property market.
At MFS we are harnessing our experience as a 17-year-old specialist lender to help deliver market-leading products and service.
Our robust funding lines ensure we are in a position to fully commit to even the most complicated circumstances, and we have underlined our commitment to providing certainty to clients by publicly declaring that our rates will not change before August.
