Falling house prices will push up rents due to a “perfect storm” in the property market, a leading expert has warned.
House prices fell by 2.3% in November, marking the biggest monthly drop since the beginning of the financial crash in 2008, according to an index.
The fall is the third in a row and means since October the average house price has fallen by over £7,000.
In October the average house price was £292,406, last month it was £285,579.
The annual rate of house price growth slowed to 4.7%, from 8.2% in October, Halifax said.
Wales and the South West of England have recorded particularly sharp slowdowns in annual house price growth.
Jonathan Rolande, director of House Buy Fast, told GB News: “It's a very strange market out there at the moment.
House prices fell by 2.3% in November, marking the biggest monthly drop since the beginning of the financial crash in 2008, according to an index. Victoria Jones
“What we're seeing is a kind of perfect storm for the property market. And surprisingly, it's to do with rental and sales prices because, of course, they're very closely intertwined.
“Landlords keep an eye on property prices, not just the rent that they're receiving, but also the amount that their property value is going up or down, and actually that's where most landlords make their money.
“It's not from the £100 pounds profit a month that they might be getting on the rent. It's actually from the capital growth.
“If that starts to disappear, and not grow, or worse, still be eroded, they're going to be quitting the market, putting the market means there's a smaller supply of property. And that will lead to an increase in rents.”
He told Isabel Webster and Andrew Pierce: “The Kwarteng Budget was really the catalyst for all of this.
“We saw rates rise so rapidly, well over 6% for a five-year fixed rate. It has now come down to just under six, perhaps 5.9% but compare that to a year ago and it was half the price.
“What it's done is to take buying power away from purchasers of property, be they've owner occupiers or investors. So the investor market is actually now putting the market we're seeing
“My company, House Buy Fast, we're seeing huge amounts of inquiries from landlords. We had very few in the early part of this year or in the last 10 years.”
Jonathan Rolande joined Isabel and Andrew on Breakfast GB News
Mr Rolande told GB News: “Frankly, people have hung on to properties, but now they're exiting and it's not just that prices are falling. Landlords have been hit by the increase in mortgages, so that's eroded their profit, there have been tax changes that have hit them hard in the wallet.
“They're also suffering with increased maintenance costs, if you think they must pay for boiler like all of us in homes, boiler repairs, roof repairs and managing agents fees and so on. All of those things have been hit by inflation.
“We've seen huge inflation in the property building sector. Labour and materials have increased partly due to COVID supply and demand, so they're being hit in every way.
“And of course, if they're looking at the value of their property and that's producing, they're just going to think ‘why am I bothering’ and they are going to sell.”