Although this is heavily influenced by London falls, the South East and South West of England are also negative.
There are modest gains in some parts, with the strongest levels shown by Northern Ireland and Scotland, however these are from a lower base.
Stock levels on estate agents’ books have remained flat and are not much up on the all-time low set in February. And rental growth expectations are subdued.
Likewise the Halifax house price index showed a drop of 3.1% in April, the biggest monthly fall since September 2010.
It was partially due to a reversal of the 1.6% gain in March, but also showed how uncertain the market is, even though there is still year-on-year growth of 2.2%.
Can’t sell properties
The combination of dampening price growth expectations and the lack of property on the market seems to have discouraged sellers, primarily those who are seeking to up or downsize.
Tightening of long-term mortgage availability is also having a negative effect.
A survey for The Times by Hamptons International Estate Agents indicated that the number of properties owned by buy-to-let landlords has dropped by 88,000 in the last two years.
This has been more than compensated by the fact that the number of accidental landlords has grown by more than 230,000, mainly due to the inability of these individuals to be able to sell their properties for acceptable amounts.
The problem up to now is that the government’s attempts to make individual property investment less attractive has not led to the availability of more affordable homes and in many localities, people who would like to own their homes simply cannot afford to do so.
Why is this an opportunity for alternative finance, including bridging? There are many reasons.
Rather than buying a new home, upscalers are making improvements to their current homes. Short-term finance, including second charge bridging loans can be used to fund this, with longer-term mortgages obtained when the work is completed.
Smaller property investment firms could use short-term funding to develop or renovate rental property.
Where a property is currently not habitable due to neglect or lack of facilities, bridging finance could be used to fund the cost of renovation.
This would enable owners to either sell or let the property once it was ready for habitation.
Bridging cover the cost
A survey by MTF found that 57% of 84 property investors struggled to find mainstream funding for buy-to-let property.
A large number of these were able to fill the funding gap with second charge loans or bridging finance.
Accidental landlords may consider transferring property to corporate entities to avoid the taxation issues which they face, rather than offload property at unacceptable prices.
This should only be done after obtaining professional tax advice, but if they do decide to do this, bridging finance could cover the immediate costs of following this route.
Longer-term finance could then be obtained once the transaction has been completed.
The demise of buy-to-let investments has been predicted since the significant tax changes were first mooted in 2015, but continuing low interest rates and predictions of a major stock exchange adjustment have reinforced investors’ faith in property.