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The Renters Rights Bill: What We Know, What is to Come, and What Might Change?

Posted on by prateek

The UK rental market is no stranger to change, and with the Renters’ Rights Bill (RRB) on the horizon, landlords, tenants, and letting agents need to stay informed as those who do not keep up to date now, will be left in the metaphorical dust after the bill is passed.

Nothing is set in stone until the bill receives Royal Assent, so take the following as purely what we know for now, rather than gospel. Got it? Good! So, without further ado, here’s what we know so far—and what it could mean for the rental market landscape in the months to come.

Current Rental Demand & Market Trends

Before we step into the Renters Rights Bill, it is important to understand the current market landscape. Here is what we know –

  • Across the UK, there has been a ~30% drop in rental demand from tenants since January 2024.
  • Despite this decline, rents continue to rise due to a lack of available rental stock.
  • With rents up and mortgage rates down, now could be a favourable time for property investment despite the turmoil caused by the RRB.

New Sanction Checks – Effective 14th May 2025

Letting agencies will be required to conduct sanctions checks on all landlords and tenants under the Sanctions and Anti-Money Laundering Act 2018. If a guarantor is paying rent directly or interacting with the agent/landlord during the tenancy, they must also undergo checks, a big change from days past.

  • These checks will be mandatory for all letting agencies in the UK, agencies that do not comply will face fines.
  • Third-party companies such as Goodlord can manage these checks for tenants and guarantors as part of the referencing process. Check with your local agency how they intend to undertake these checks, as this might differ.
  • One major change is that AML checks will be conducted on all new landlords upon instruction.

For the official government guidance, visit: Sanctions Guidance for Letting Agents.

The Renters’ Rights Bill – What’s Coming?

After what feels like an age, we now have some potential dates to put in place. Firstly, the Bill is expected to become law between July & October, with an implementation date shortly thereafter, likely in January 2026. We are expecting the changes to take effect immediately, there will be no grace period, meaning all fixed-term Tenancies will become periodic overnight.

Key Changes Include:

Impact on Letting Fees – With fixed terms disappearing, renewal fees will all but disappear. A sliding scale fee structure may be necessary if tenants leave shortly after starting a new Tenancy. This is something we are monitoring closely and will update all of our current landlords as and when we have more information. For landlords outside of our network, do check with your letting agent too and make sure to keep in contact with them about the RRB over the coming months.

Applies to Assured Shorthold Tenancies (ASTs) Only – Corporate lets remain unaffected.

A New Single Ombudsman – Landlords must register with a centralised Ombudsman or face fines. Agents are expected to be allowed to register on behalf of Managed Landlords.

New Digital Portal – A government-run landlord portal will be introduced for compliance monitoring.

Bidding Wars Banned – It will become illegal for tenants to offer over the asking rent, regardless of their situation. We are currently anticipating this could lead to landlords pricing higher initially before adjusting down. However, advice about this approach will be given as and when the time comes. It is not something we are expecting to recommend as you may end up pricing out a lot of your target demographic.

Anti-Discrimination Measures – Landlords cannot refuse tenants based on family status, children, pets, or benefits. For most landlords, this won’t change anything, but it is something to be made aware of.

Advance Rent Restrictions – The first rent period cannot be an advance payment, but loopholes are being debated. Our advice? Avoid creative workarounds – they are unlikely to hold up in practice and could well result in fines.

Rent Reviews & Inflation – Rent increases will likely have to align with inflation. Tenants will have easy access to tribunals to challenge hikes beyond this threshold at no cost to themselves going forward.

What Happens Next?

We’ll be keeping a close eye on updates, with more details expected in the coming months. Our MARLA-qualified colleagues are attending many Propertymark conferences over the coming months where more information will be available to us and will pass relevant details on to landlords and tenants as and when is suitable.

As we have stated, until the final bill is produced, everything remains hypothetical. But one thing is certain: change is coming, and preparation is key. If you have any questions do get in touch with us. We will help you as well as we can for now. We are planning on creating plenty of videos and blogs over the coming months about the RRB so be assured we will not be leaving anyone in the dark.

For expert guidance on Renting, Letting, Buying or Selling property in Bath, contact us today.

To view our latest Sales Properties in Bath, click here – Properties for Sale in Bath (residebath.co.uk)

To view our latest Rental Properties in Bath, click here – Properties – Reside Bath

To Read Previous Renters Rights Bill Articles, click below:

https://residebath.co.uk//20241003/renters-rights-bill-what-does-it-mean-for-you/
https://residebath.co.uk//20240913/renters-rights-bill-update-what-bath-landlords-need-to-know/

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What happened in 2024 and what is going to happen to the market in 2025?

Posted on by prateek

As a local lettings and estate agent in Bath, it is crucial we take some time at the beginning of the year to pour over last year’s statistics and take a view to what is to come in 2025. Analysing the 2024 property market locally, here in Bath, and nationally allows us to make some predictions for what we think will happen to the property market in 2025.

In 2024, the UK property market recorded 1.2m homes sold subject to contract (SSTC). This represents a 15% increase when compared to 2023, where 1.06m homes went SSTC.

The average price of a property SSTC in 2023 was £354,981 and the average sale agreed price was slightly higher at £361,529. The number of transactions has significantly risen, while the average price paid stayed around the same. That means that while house prices have not really risen, the number of UK homes that sold did significantly. Remember, the best bellwether of the health of the UK property market is not necessarily UK house prices but the number of homes sold.

So, what were the key drivers in this surge?

  1. FALLING MORTGAGE RATES
  2. Lower interest rates made borrowing more accessible. This in turn encouraged buyers who may have been previously hesitant at the higher mortgage rates.
  • WAGE GROWTH
  • Rising wages have given potential buyers greater financial confidence, enabling them to consider property purchases.
  • LOW UNEMPLOYMENT
  • A stable job market gave a sense of security to buyers, allowing them to make investments.
  • CHANGING PREFERENCES
  • Post pandemic adjustment in peoples personal and work lives have been key players in what people want out of a home. A few years ago when Work From Home was encouraged or compulsory, people wanted more space and didn’t have to worry about the commute time. Now, as more people are pushed back into the office, there is a shift again into people needing to move closer to their employers office.

Turning our attention to the local level here in Bath, it is important to recognise that local markets can behave differently from the national trends. In 2023, 1,919 homes sold in Bath for an average of £564,000 at an average of $482/sq.ft. Whilst in 2024, 2,183 homes sold at an average cost of £580,000 with an average of £472/sq.ft.

This is an 11% increase in transactions. So, what for 2025?

LOCAL INFLUENCES SHAPING THE MARKET:

Baths property market doesn’t exist in isolation, it is shaped by a range of local factors that are often similar yet different when compared to the national trends. Changes in employment levels, ongoing infrastructure developments and shifts in the demographic profile all impact the market. Regional policies can also influence market activity. Understanding these nuances is crucial in making an informed decision.

As we move into 2025, the property market here in the UK shows continued promise. Evaluating your property’s position within the Bath market could make all the difference in navigating opportunities or mitigating challenges in the year ahead. While 2024 was strong, it’s critical to go beyond the headlines. Local insights often reveal opportunities that broad trends don’t capture.

The Key to Selling – Realistic Pricing

Looking at the statistics above, over half of the properties listed for sale in Bath go on to sell. This highlights an essential truth about the Bath property market: pricing your home realistically is the single most crucial factor in securing a successful sale. Many estate agents are tempted to overprice properties to win your business, but this approach can significantly hinder your chances of selling, especially in a competitive market like Bath.

Research reveals that properties listed at the right price from the start are far more likely to sell quickly and successfully. For example, homes that sell within the first 25 days of being listed have a 94% likelihood of reaching completion and ensuring the homeowner successfully moves. However, if a property lingers on the market for over 100 days, if the homeowner does agree on a sale, the chances of that sale going on to exchange and complete (i.e. the homeowner moving) plummet dramatically to 56%.

As an experienced local property agent in Bath, we understand the intricacies of our market and can provide honest, expert advice about your property’s value. We aim to help you set a realistic asking price that maximises your chances of selling while achieving a fair and competitive market value. I analyse local market conditions daily and stay up-to-date with shifting trends, ensuring your home is priced to sell – not to sit on the market.

If you’re eager to move and want a reliable, professional approach to selling your home in 2025, we’re here to help. Let’s work together to make your property stand out in Bath’s market, attract motivated buyers and ensure a smooth sale from start to finish. Get in touch today for tailored advice and a strategy to sell your Bath home.

Bath House Sales Up 14.5% on 2023 – What does this mean for the local market?

Posted on by prateek

The number of agreed UK property sales up to the 22nd of November 2024 is 18% higher than a year ago. Breaking this down further, as of 22nd November 2024, 1,009,340 homes were sold subject to contract (SSTC), an 18% increase from the number of homes SSTC in the same period of 2023. The average UK selling price has also significantly risen, reaching £361,000 compared to £326,000 in 2023, an 11% rise.

This doesn’t mean house prices have risen by 11%. Across the country, there has been a shift and more high-value properties have been selling this year compared to last. It is due to this factor that using £/sq.ft is a better judge of house price increase. The pound per square foot has risen only by 2.7% over the last year, climbing from £331 to £340 (which is in line with the major house price indicators).

A BUYER’S ADVANTAGE –

Sellers currently face a market where realism is the key to a good, and fast, sale. As of the 22nd November 2024, 2,061 Bath homes had been sold STC, a 14.5% increase from the 1,800 homes sold in the same period last year. The average Bath selling price has risen slightly, reaching £586,652 in 2024, compared to £562,066 in 2023 (a rise of 4.3%).

The £ per square foot on the homes sold STC for Bath has been £472 per square foot in 2024, compared to £482 per square foot in 2023.

In 2023, 59.64% of Bath homes that came to market were successfully sold (completed and exchanged). In 2024, that figure has slipped to 58.94%. This change reflects buyer expectations and affordability shifts, emphasising the need for careful pricing strategies. (Bath – BA1/2 – 1st Jan to Nov 22nd).

National figures showed that 52.96% of properties were sold (exchanged and completed) in 2023, only slightly improving to 53.62% in 2024.

If you think about it, you have just over one in two chances of selling if you put your home on the market; therefore, accurate pricing is more important than ever, but it isn’t the only factor. Homes that stand out in today’s market often do so because of exceptional marketing. Virtual or video tours, high-quality photography, and targeted social media campaigns are no longer optional—they’re essential. For sellers looking to maximise interest and achieve a strong price, presenting their property in the best possible light is a non-negotiable step.

BATHS UNIQUE MARKET DYNAMICS

Bath’s property market has always had its quirks, and this year has been no exemption. Different postcode areas are experiencing varying levels of activity. In some areas of the city (and villages), homes are selling quickly, while in others, buyers have more room to negotiate, whether on price, fixtures, or even completion dates.

This means that flexibility can be an asset for buyers. Expanding your search radius or considering properties slightly outside your initial criteria could reveal opportunities that others have overlooked. For sellers, understanding these local variations is critical to setting the right price and crafting an effective marketing plan.

A Balanced Perspective: The Seller-Buyer Dynamic

It’s worth remembering that over four out of five sellers are also buyers. This dual role often means that what might be perceived as a loss on one side of the transaction can be recouped on the other. A slightly lower sale price on your current property may open the door to negotiating a better deal on your next purchase.

External Factors Shaping the Bath Market

No property market operates in isolation, and Bath is no exception. National and global trends will inevitably influence it.

That said, Bath’s property market has shown resilience in the past, which is likely to continue. While challenges remain, stabilising mortgage rates and a steady economy offer hope for a more active market in the coming months.

Final Thoughts

As Bath’s property market moves into 2025, success will hinge on understanding the current dynamics and being prepared to adapt. For buyers, this means having your finances in order and being ready to act quickly when the right property comes along. For sellers, setting a realistic asking price for your Bath home ensures your property is effectively marketed from day one.

The journey requires a thoughtful approach, whether buying, selling or keeping an eye on the market. There are both opportunities and challenges ahead – but with the right strategy, the path forward is clear.

What’s your perspective on Bath’s property market? Have you noticed similar trends, or do you see things differently?

To view our latest Sales Properties in Bath, click here – Properties for Sale in Bath (residebath.co.uk)

To view our latest Rental Properties in Bath, click here – Properties – Reside Bath

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Bath retirees turning to rental properties: what it means for landlords.

Posted on by prateek

Recent figures from the Office for National Statistics (ONS) revealed that across the UK, nearly half a million households are occupied by individuals aged 65+ living in the private rental sector. This represents 6.7% of all OAPs now renting privately.

Ten years ago, only 267,000 households were occupied by individuals aged 65+ who lived in privately rented housing. At the time, this represented just 4.39% of OAPs. So, it is clear from the outset that the dynamics in the market have changed significantly, with over a 50% increase. So, what does this data mean?

WHY ARE RETIREES RENTING?

A survey by The Prudential a few years ago shed light on this upcoming trend. Nearly 60% of older renters have always been renting. Around 20% have sold their homes to address debt challenges, and another 10% have sold their properties intentionally with the desire to rent in older age, often using the proceeds to fund their retirement or allow more freedom and less maintenance.

Financial stability is increasingly important. Men in Bath, upon reaching 65, have an average life expectancy of 19.6 years, while women can expect to live an additional 22.1 years. Interesting when compared to the national averages of 18.1 years for men and 20.6 years for women.

However, longer life expectancies come with the challenge of sustaining finances over an extended period, particularly as inflation, rising living costs, and low interest rates erode retirement savings.

THE RENTAL LANDSCAPE IN BATH.

30% of people who live in Bath and North East Somerset (BANES) are over 65 years old. A significant majority of over 65’s, 76%, own their homes outright. 6% own their homes with a mortgage and then social housing accounts for 12%. This leaves 5% of over-65s in the area being privately rented.

This figure, whilst small, is on the rise. Anecdotal evidence suggests that property professionals are seeing more retirees in Bath choosing to sell larger homes they own and downsize into rented accommodation. This reflects a desire for more simplicity and financial flexibility upon retirement. Selling a home with or without a mortgage offers up substantial equity which can then be passed down to future generations via better investments, funds and allow a more comfortable retirement.

Renting also offers predictability. With a fixed monthly expenditure that typically includes property maintenance and potentially even services like gardening, retirees can budget with confidence. This arrangement removes the financial and logistical burdens of homeownership, such as unexpected repair costs, allowing for a more carefree retirement. Renting also offers flexibility, enabling older tenants to relocate with ease if their circumstances change, such as moving into assisted living or care facilities.

OPPORTUNITIES FOR BATH’S LANDLORDS:

This shift presents a unique opportunity for Bath’s buy-to-let investors. Older tenants often seek properties that are low-maintenance and designed to suit their needs. Semi-detached bungalows, particularly those located near essential amenities such as bus routes, GP surgeries, and shops, are in high demand. These homes are often preferred for their accessibility and practicality.

For landlords, catering to this demographic can yield excellent returns. Retirees typically value stability, making them reliable, long-term tenants. Furthermore, if a property meets their needs and provides additional conveniences like included maintenance services, they are often willing to pay a premium rent for the right home.

The Bigger Picture for Bath Landlords

As the population ages, the demand for rental properties suitable for older tenants is likely to grow as the Centre for Economics and Business Research (CEBR) stated in the report this summer that they expected the number of OAPs privately renting to double in the next decade. This trend presents both challenges and opportunities for landlords in Bath. By understanding the needs of this demographic and tailoring their portfolios accordingly, landlords can not only secure steady returns but also play a role in supporting the housing needs of an ageing community.

For the private rental sector, this demographic shift highlights the importance of creating housing solutions that balance profitability with social responsibility. As leaders in the Bath property market, we must champion approaches that meet these emerging needs while promoting long-term sustainability in the rental sector.

The Future of Buy-to-Let

Posted on by prateek

Upcoming future legislation and the recent announcements in the autumn budget have stirred up some anxiety for the future of Buy-To-Let (BTL). The chancellor’s decision to increase the Stamp Duty Land Tax (SDLT) from 3% to 5% for landlords purchasing additional properties initially suggested a grim outlook for the buy-to-let sector. This move, coupled with the introduction of the Renter’s Rights Act, which proposes to abolish section 21 and effect a landlord database, poses new challenges for Bath Landlords but also opens doors to new opportunities. Despite these new hurdles approaching, looking in detail at market insights reveals reason for some optimism among property investors.

Taxation Changes: Assessing the Impact

The Tory and now Labour government policy changes towards the BTL sector aim to cool an overheating property market. Raising SDLT aims to redirect investment opportunities toward first-time homebuyers priced out of the market. Although this policy aims to level the playing field, it has raised concerns among investors about shrinking profit margins and thus the overall attractiveness of investment in the property market.

Despite these concerns, maintaining the current (lower) capital gains tax rates has provided a buffer, easing investor anxiety and stabilising the investment climate. However, many landlords remain cautious, aware that the stability of these rates can change as part of broader fiscal adjustments.

The Renters’ Rights Act: A New Standard

The proposed Renters’ Rights Act will abolish section 21 evictions, which allows landlords to terminate tenancies without fault. This change aims to offer greater security to tenants and ensure that there is fair treatment across the whole rental sector. Whilst this move is a positive one for renters’ rights, it does require landlords to adapt to more rigorous property management and dispute resolution strategies. This potentially increases the cost and complexity of property management.

In addition to this, the act will likely introduce stricter property standards and tenant engagement protocol. These regulations will compel landlords to improve the quality of their offering and engage more transparently and effectively with their tenants.

Market Resilience – Looking into the local market in Bath

Despite the challenges posed by increased taxation and regulatory changes, the Bath BTL market remains resilient. Demand for rentals continues to grow in the city. The average rent in Bath in 2024 was £1,759 PCM a 29% increase from 2019. Meanwhile, the number of rental properties on the market has dropped by 41.7% between 2024 and 2019.

One might say that’s all well and good, but what will this extra 2% stamp duty cost the average Bath landlord? The average price of a Bath buy-to-let property in 2024 is £345,400, meaning:

The average Bath landlord will only need to pay an additional £6,908, which is only 3.9 months’ rent.

Adapting for Success in Bath

To navigate this evolving landscape, landlords need to adopt new strategies to conquer a changing market.

  • Diversification: Landlords can spread risk and tap into different markets by creating portfolios that include a mix of residential types and target different demographics.
  • Reduction of Rent Arrears: A study by Denton House Research a couple of years ago showed that landlords who don’t use a letting agent to find them a tenant have a 272.5% greater chance of that tenant being two or more months in arrears.
  • Rent Protection: The removal of Section 21 will mean Bath landlords will only have Section 8 to remove tenants if they aren’t paying their rent or being antisocial. This could mean that if the tenant decides they don’t want to move, there could be a good 6 to 9 months of no rent (if not more). Therefore, you must take on rental insurance.

Final Thoughts for Bath Landlords:

While the initial outlook for buy-to-let investments in Bath might seem daunting due to recent legislative and fiscal changes, the underlying market dynamics suggest a different narrative. The demand for quality rental properties will likely continue to remain strong and provide opportunities for those willing to adapt to new changes.

To view our latest Sales Properties in Bath, click here – Properties for Sale in Bath (residebath.co.uk)

To view our latest Rental Properties in Bath, click here – Properties – Reside Bath

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The New Stamp Duty Increase – Another hurdle for Bath Landlords.

Posted on by prateek

The last decade has been a relentless barrage of new regulations and tax changes. From the 3% stamp duty surcharge introduced in 2016 to section 24’s limitation on mortgage interest relief, then the new renters rights act slowly passing through the government and its removal of section 21 eviction notices and finally recent reductions in capital gains tax allowances –  it is fair to say that Buy-To-Let (BTL) investors have been under relentless pressure.

Now to add to this long list, the looming EPC regulation change, requiring properties to meet tougher energy performance standards, and the latest increase in stamp duty – raising its surcharge from 3% to 5%, there feels like another layer of financial burden on top of another, and it is no wonder that many landlords are feeling stretched to the limit and want to draw a line and sell up.

However, although these changes all seem daunting –  let’s take a step back and evaluate the bigger picture.

For landlords with a long-term view, this extra cost is unlikely to fundamentally alter the financial viability of their investment. This one-off expense becomes ‘lost in time’ when spread out of the lifetime of an investment. Yes, it is a higher upfront cost, and as with any additional cost, it is not welcome. However, for most BTL investors, this increase won’t dramatically change the fundamentals. In fact, it’s like when the initial 3% surcharge was implemented in 2016; back then, very few landlords were deterred, and the market quickly adapted.

Another reason to stay positive is the remarkable growth in the rental sector seen over the last few years. In the last few years, rents have risen by 8-10% (Largely fueled by wage growth and continued supply/demand imbalance in the market) and are set to continue growing thanks to minimum wage rises, further bolstering the case for long-term BTL investment.

Furthermore, capital gains tax, though perceived as a deterrent, was reduced last year for higher-rate taxpayers, from 28% to 24% on residential property, which helps retain more of the gains made on property sales. Labour has made no change to that.

In real terms, UK house prices are now 15% cheaper than three years ago, another boost to the incentive to invest in BTL. So, ultimately, for savvy investors, now is potentially a more favourable time to secure a good deal for long-term gain. There will be a higher upfront cost that will have to be absorbed, but with a long-term vision, your investment can definitely be profitable.

While landlords are certainly facing pressures from the new EPC regulations in the coming years, history shows that when the government mandated the EPC rating to an “E” in 2018, it tempered the impact to avoid a market disruption with a maximum of £3,500 maximum spend to reach that level. We’ll likely see a similar approach this time if it risks an excessive withdrawal of rental properties from the market.

Ultimately, the buy-to-let market remains one of the few investment avenues where one can achieve both income and capital growth.

Bath landlords may need to consider this stamp duty increase when negotiating purchase prices, but for those with a long-term perspective, this is simply another bump in the road.

While change is inevitable, BTL still represents a sound investment – especially for those who are in it for the long haul.

To view our latest Sales Properties in Bath, click here – Properties for Sale in Bath (residebath.co.uk)

To view our latest Rental Properties in Bath, click here – Properties – Reside Bath

For more from Reside Bath: Lettings and Estate Agency, click the icons below!

BATH PROPERTY MARKET OVERVIEW – OCTOBER 2024

Posted on by prateek

Are you a homeowner in Bath? Perhaps you’re an individual or an investor planning on moving, buying or selling a property in the next six to twelve months, or maybe you’re on the lookout for your next home, perfect for the family, but not up against any time scale. Either way, having a clear understanding of the current state of the market here in the city of Bath is vital to making an informed decision and the right one for you or your family.

By reading our blog you can stay up to date on the latest market trends and activities which will help you plan effectively.

WHAT KIND OF PROPERTY MARKET DOES BATH HAVE RIGHT NOW?

One of the best ways to determine the current state of the market is to determine whether the market currently sits in a ‘buyers’, ‘sellers’, or balanced market. We can achieve this by looking at the ratio of properties marked as ‘sold STC’ or ‘under offer’ compared to the total number of properties available for sale.

For example, if 41 properties are marked as “Sold STC” out of 100 available, then the market is operating at 41%. This ratio isn’t just a random figure – it’s a reflection of the overall sentiment in the market.

Here is how the percentages breakdown to determine the market –

  • Extreme Buyer’s Market (0%-20%): Buyers hold all the cards.
  • Buyer’s Market (21%-29%): Buyers have the upper hand but not as strongly.
  • Balanced Market (30%-40%): A stable equilibrium between buyers and sellers.
  • Seller’s Market (41%-49%): Sellers begin to gain the upper hand.
  • Hot Seller’s Market (50%-59%): Strong competition among buyers.
  • Extreme Seller’s Market (60%+): Sellers dominate, with properties moving fast.

These benchmarks play a critical role, influencing everything from listing prices to negotiating leverage.

THE CURRENT SNAPSHOT OF THE BATH PROPERTY MARKET:

  • Oct-16 – 51%
  • Oct-17 – 44%
  • Oct-18 – 37%
  • Oct-19 – 38%
  • Oct-20 – 46%
  • Oct-21 – 65%
  • Oct-22 – 64%
  • Oct-23 – 50%
  • Oct-24 – 51%

As is expected, it was a stronger market for Bath sellers in the post-Covid years, yet things have settled down now to levels seen before the pandemic, this current percentage of 51% puts us just into a hot sellers’ market.

WHAT THIS MEANS FOR BATH SELLERS:

If you’re looking at selling your property in Bath, the current market conditions require more patience and flexibility than in 2021. The days of the stamp duty holiday and properties flying off the market within days are behind us and this means that sellers need to focus on their property marketing and prepare for longer periods on the market.

A crucial step in getting your property sold in this market is to make sure that the property is priced correctly. Now that supply is outstripping demand, it is crucial that you price your property correctly to attract demand and not deter potential buyers.

This month, 57% of properties that came to the market sold STC and to completion. The rest left the market unsold. Nationally there has also been a downward trend in the number of properties selling. This is likely due to the impending budget and potential buyers wanting to secure a lower mortgage rate if inflation continues to fall.

In light of these changes, your marketing approach should be one that is well thought out and gives your property the best chance of selling. Utilising digital tools such as virtual tours, video marketing and social media posts can give your property a competitive advantage, and help gain more serious buyers in a market where securing interest is becoming increasingly challenging.

WHAT THIS MEANS FOR BATH BUYERS:

For buyers, particularly in sought-after areas in the city, the competition remains fierce. Securing a mortgage agreement in principle will give you a significant advantage over others in such a competitive environment.

In less competitive areas, buyers have more room to negotiate. You’ll likely find more flexibility on price and even some extras, such as fixtures, fittings, or other incentives thrown in by sellers eager to close a deal. The pressure to make quick decisions is reduced, allowing you more time to thoroughly consider your options.

It’s also worth remembering that most sellers are also buyers, so any loss you may experience on the sale side should be offset by a better deal on your next purchase.

External factors such as global economic trends, events, inflation, and interest rates will continue to influence the Bath property market in the coming months. Keeping an eye on these trends is essential for buyers and sellers alike.

Final Thoughts

As we enter November 2024, the Bath property market presents both opportunities and challenges for buyers and sellers. Understanding the subtle shifts in market dynamics is crucial for anyone planning a move, whether you’re a seasoned investor, a first-time buyer, or looking to relocate within the area.

Staying flexible, informed, and prepared will make all the difference in navigating this market. The experience of moving is as much about the journey as it is about reaching your destination.

THE NEED FOR REALISTIC PRICING  – A CLOSER LOOK AT THE BATH MARKET DYNAMICS (2019-2024)

Posted on by prateek

The Bath Property market has undergone significant changes over the past few years, as depicted in the graphs below. These visual aids capture the trends in the number of properties available for sale and the number of properties sold subject to contract (SSTC) from January 2019-2024. By analysing these graphs, we can gain insight into the evolving dynamics of the local property market and the necessity for Bath homeowners to adopt realistic pricing strategies when bringing their homes to market.

A CLOSER LOOK AT THE BATH MARKET DYNAMICS (2019-2024) –

From January 2019 to February 2020 (a normal market), the number of properties for sale in Bath remained relatively stable, at an average of 1,278 homes (bath being BA1/2). This pre-COVID period also showed a steady number of properties being sold each month, with an average of 181 home sales. This indicated a balanced market where the supply of homes was more or less matched by buyer demand.

The Bath property market underwent a noticeable shift with the onset of the COVID-19 pandemic in late March 2020. As the pandemic gripped the nation, the number of properties that sold in April and May 2020 plummeted sharply. This was due to the uncertainty brought about by the pandemic. Many buyers held off amidst the uncertainty.

However, the floodgates opened once the property market lockdown was lifted in May/June 2020. The number of properties coming onto the market between June and August 2020 rose by 27% above the long-term average for that time of year, and the number of homes selling also rose.

In Bath, in the 20 months between May 2020 and December 2021, the average number of Bath homes sold per month was 245, with the biggest month being 342 homes Sold Subject to Contract (SSTC). However, the number of homes for sale slowly dropped throughout the period to an all-time low of just 540 homes for sale in December of 2021.

What stands out during this period is that despite the reduced number of Bath properties for sale, the number of properties sold remained robust. This surge in demand, despite a drop in available Bath homes, can be attributed to the combination of pent-up demand and the government’s intervention in the property market. Most notably the stamp-duty-holiday incentivised buyers to move quickly before the levy was lifted.

As the dust settled moving into 2022, the property market began to feel as it was coming back towards and ‘normal’ market. The number of homes selling settled down and the general level of properties for sale steadily began to rise. However, as we ended the summer of 2022, the property market was struck twice within a span of 12 months.

The first hit on the market came in the spring of 2022 when then Prime Minister, Liz Truss and her chancellor Kwasi Kwarteng, produced their now infamous mini budget. Following this, there was a five-month period dropped, stooping to an average of 140 sales per month. It started to recover in the spring of 2023, as home sales rose to an average of 223 sales per month, only to be hit again when the increasing interest rates started to really bite in the summer of 2023. Home sales then slumped to 181 sales per month during the summer of 2023.

NUMBER OF BATH HOMES FOR SALE AFTER JANUARY 2024 –

Since January 2024, the number of Bath homes selling has been at an average of 218 homes per month. However, the number of homes for sale has steadily risen to 1,213 in August 2024 alone. The significant increase in supply could be due to various factors, including homeowners taking advantage of high property prices at the moment, an increase in new builds, or even a growing number of properties that failed to sell in previous months/years now being re-listed with a new agent.

PERCENTAGE PROPORTIONS: BATH VS. UK TRENDS –

The second graph below delves into the dynamics here by comparing the same set of numbers to each other and expressing them as a percentage.

By doing this, we can see the proportion of monthly homes sold relative to the number of properties available. This yellow line on the graph represents the % of Bath properties sold SSTC during the month as a proportion of the homes for sale. The red line shows the equivalent figure for the UK average.

The graph reveals important information. Throughout 2020-early 2022, the proportion of UK homes sold in Bath (yellow line) spiked into the mid to high 30% range. This aligns with the earlier observation that despite fewer homes being available, a higher percentage of these homes were being snapped up quickly by buyers wanting to make the most of the government intervention following the pandemic.

However, as we moved to 2022 and beyond, this trend began to reverse. The proportion of homes sold (as a percentage of homes for sale) in bath started to decline and now the figure stands around the mid-teens.

SO, WHAT DOES THIS MEAN FOR BATH HOMEOWNERS? –

The stable number of home sales against a backdrop of increasing supply could be signaling that there is a potential issue. The market may be approaching a tipping point where supply outsees demand and thus prices begin to fall as the market becomes a buyers’ market and there are more options for buyers. This increase in supply means those serious about getting a sale need to make sure they are getting their homes valued and listed at a realistic price mark. Pricing too high in this market will lead buyers to be deterred by other options they have available with such a high supply.

A price too high in this market will lead to long listing times, and price reductions, both of which can deter some buyers as they may assume this is due to an unforeseen issue within the property. Neither of these are wanted by sellers so it is critical that you get that listing price correct.

Also, remember that a longer listing time means that a sale is more likely to fall through, even if a sale is agreed upon. Looking at an examination from Denton House Research using data from TwentyEA, they noted that if a UK home sold within 25 days of the property coming to market, there was a 94% chance of the sale going all the way through to completion. If the sale was agreed upon over 100 days after it was listed on the market, then the chances of actually completing the sale is reduced vastly to 56%.

IN CONCLUSION –

Whilst the Bath property market remains active, ‘this has introduced a new challenge for sellers. To achieve a successful sale, Bath homeowners must pay close attention to market trends and set their prices accordingly. Realistic pricing and an understanding of the broader market dynamics will be vital in navigating this evolving landscape. As the data suggests, the market is still healthy, but the balance of supply and demand is shifting which is making strategic pricing is more critical than ever.

RENTERS’ RIGHTS BILL UPDATE – WHAT BATH LANDLORDS NEED TO KNOW.

Posted on by prateek

On Wednesday, Parliament had the first hearing of the Renters’ Rights Bill, the revision by Labour of the previous government’s Renters Reform Act. There was a lot of information given during the hearing so let’s take a moment to take a look at what this could mean for your investments in the future.

Let’s begin by reassuring you that nothing groundbreaking was heard in these proposals that will catch you off guard. Most of what was heard was already in the previous bill by the Conservative government. Regardless, let’s break down what was involved and what might affect you as a Bath Landlord going into the future.

THE END OF SECTION 21 (‘NO FAULT’) EVICTIONS:

The big headline in the news outlets was the abolition of Section 21 evictions. For years now, landlords have been able to issue a section 21 notice, which gives tenants two months to leave the property through no fault of their own. Many have viewed this as unfair, particularly when they have been used to displace tenants who challenge landlords’ provision of poor living conditions or challenge rental increases they deem unfair.

Landlords won’t be without power. You will still be able to evict tenants who break rules under Section 8 of the Housing Act. This will cover situations such as failure to pay rent, damage to the property, and antisocial behaviour. The main difference here between a section 21 and a section 8, is that the latter requires a court order. The concern here is that in recent years these court orders have faced significant delays. However, the government has assured us that they will work to clear the backlog and streamline the process.

RENT INCREASES AND BIDDING WARS:

Another important point heard on Wednesday’s hearing was the ban coming in on bidding wars. Over recent years, some cities have seen an influx in rental bidding wars. This has been caused by over-demand and under-supply, which has then led to two people trying to offer more than the other over the asking rate of rent and leading to ‘a bidding war’. This new piece of legislation will make it illegal to ask or accept any offers from potential tenants over the advertised rent. This may stabilise the market, but it is something to keep in mind when setting rent prices for your Bath rental property.

In addition, in-tenancy rental increases will be limited to once a year and will no longer be allowed during the period of the fixed term of a tenancy. Whilst this ban may seem restrictive, it does provide a sense of stability for tenants and in turn may encourage longer-term lets.

ENERGY EFFICIENCY AND PROPERTY STANDARDS FOR BATH LANDLORDS:

 This proposed act introduces a stricter regulation on the quality and energy efficiency of rental properties. By 2030, landlords will need to ensure that their properties are given an Energy Performance Certificate (EPC) rating of C or above. (For more information about EPC Certificates see this article: How will the new EPC rules affect Landlords? (residebath.co.uk)). This is a long-term requirement, so although it may require investment at first, there is plenty of time to plan these changes, check the regulations, and plan accordingly.

The introduction of the Decent Homes Standard into the private rental sector means that Bath Landlords will also need to ensure their properties and maintained to a certain standard. This will particularly look at hazards such as dampness and mould, a common issue among Bath properties in particular. It is a move that is aimed at improving the overall quality of rental accommodation and whilst it may mean more responsibility for more landlords across the city, most landlords will already be meeting these standards.

GOING FORWARD:

If any one of these proposed changes is causing any concern then do not hesitate to get in touch with our team, we would be happy to help you understand these changes further. Being a team in Bath affiliated closely with the governing body, Propertymark, we are continuing our professional development and are constantly keeping up to date with the latest changes. Do also keep an eye on this blog page which is continually updated with all the latest news in the property industry here in Bath and beyond.