The UK property market has continued to be relatively quiet in May and June 2023, with house prices continuing to rise at a slower pace than in previous months. Mortgage rates have also started to rise, which could dampen demand in the coming months.
The Bank of England raised interest rates in May and June 2023, as it had been expected to do. The base rate is now at 3%, the highest level since 2009. This makes it more expensive for people to borrow money, which could lead to a slowdown in the property market.
Buy to let
Buy-to-let landlords are facing increasing challenges as the cost of borrowing money rises. This could lead to some landlords selling their properties, which could put downward pressure on house prices.
HMOs
House in multiple occupation (HMO) landlords are also facing challenges, as the government has introduced new regulations that make it more difficult to operate HMOs. This could lead to some HMOs being converted into single-family homes, which could also put downward pressure on house prices.
Single family lets
Single-family lets are likely to be more resilient to the challenges facing the property market, as they are less reliant on mortgage lending. However, even single-family let landlords may face some challenges, as the rising cost of living could make it more difficult for tenants to afford rent.
Conclusion
The UK property market is facing some challenges in the coming months, but it is still too early to say what the long-term impact of these challenges will be. The buy-to-let and HMO markets are likely to be most affected by the rising cost of borrowing money and the new regulations. Single-family lets are likely to be more resilient, but even they may face some challenges. Buyers and sellers should be prepared to act quickly and be flexible in their expectations.
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