A new year is on the horizon and I am hopeful 2023 will be less turbulent for our finances. Inflation is expected to fall sharply in the middle of next year and mortgage rates are already on the descent.
But despite the glimmer of hope, the extent of the damage done has already altered the economic backbone of Britain – its housing market. House price falls have gained pace after soaring mortgage rates drastically reduced borrowers' buying power. But those already on the property ladder are also in trouble, particularly in the buy-to-let sector.
Landlords are rapidly selling up as their fixed-rate deals expire and higher mortgage rates destroy their profit margins. Buy-to-let investors across the country are rushing to shed loss-making properties, but landlords in London will be hit especially hard. Losses for investors will be substantial. When Charlene Deane, a landlord near Bristol, comes to the end of one of her fixed-rate mortgages, her £930 per year profit on the property will become a £4,980 loss.
The impending buy-to-let crisis will expose the landlords of 365,000 properties to losses next year and risks triggering a wave of property fire sales that could further drive down house prices.
The collapse also has repercussions for tenants, who could find themselves evicted if owners leave the market. But renters looking to buy will be met with a systemic housing shortage that keeps younger generations off the property ladder. New numbers released this week found Britain's dearth of housing has been exacerbated by an ageing population reluctant to downsize.
More than a million bedrooms have been locked out of the housing market in five years, according to the English Housing Survey. Click here to find out why parents staying in family homes long after their children flew the nest are partly to blame.
Elsewhere strike action has continued to cause havoc in the run-up to Christmas, but the postal system was already struggling before the industrial action. We take a look at the postcodes made to wait the longest for post, with a Surrey town topping the list.
Get in touch
www.myResidential.org
sales@myResidential.org