MARKET
EXPERT COMMENT
If mortgage rates stabilise at current levels, we expect sales activity to continue to hold up well compared to last year. Further increases in borrowing costs could weaken demand and impact sales volumes later in the year. The outlook is far from clear although we can see demand has stabilised over recent days. For buyers, there is less competition and more choice, but affordability is becoming more stretched.
celebrate the achievements of organisations in bringing them back into use.The latest report found that one in every 25 homes in England is currently empty, equating to over a million homes. The research also found that half of the public, 49%, would like abandoned and derelict buildings in their home towns to be revived for new purposes such as housing, business or retail. Research by specialist lender Together found that over half of Brits, 52%, walk past a deserted and derelict building every week. Since 2022,Together has seen a 95% increase in the number of bridging loans the lender has funded, some of which will have been used to bring empty, run-down or otherwise “unmortgageable” homes back into use. Together’s sales director Elliot Vure says that, while the nation often focuses on building new homes, a large and often overlooked percentage of homes in England are lying empty. “It’s high time we transformed derelict properties into homes. Traditional mortgage products often aren’t suitable for empty or dilapidated homes, especially where a property is deemed uninhabitable.That’s where specialist lending can play a vital role.”Vure believes that there is a shortfall in local authority power and resources for identifying these empty homes and taking action on empty home complaints within councils. “There are also barriers for prospective buyers, investors and landlords to accessing the right kind of finance once these properties are on the market.” HIGHEST EVER PRICE GAP BETWEEN FIRST TIME BUYER AND SECOND STEPPER HOMES The picture for first time buyers is challenging but so is trading up the property ladder. Latest data from Rightmove shows that the price gap between a typical first time buyer home and a second-stepper home is at its highest ever, increasing cost pressures on those looking to trade up.The average asking price for a three or four bedroom typical mid-market second stepper home is 52% more than a one to two bedroom, typical first time buyer home.Trader-uppers must build up an additional £23,780 in equity for a deposit on average, to afford to trade up from a typical first home to the second rung on the ladder. It’s most expensive to trade up from a first time buyer home in the South East and cheapest in Yorkshire & The Humber.The report found that over the past 10 years the average price of a flat has only increased by 8%, compared with a 34% increase for houses.
four years thanks to lower base rates and stronger competition between lenders. Rates on both two-year and five-year fixed deals were below 4% for the first time since 2022 but have since risen to 5% following economic uncertainty and inflationary fears.
CHEAPEST TOWNS IN ENGLAND
Zoopla also carried out some separate research looking at the most affordable towns to buy a home.While acknowledging that uncertainty is building on the back of events in the Middle East, its data shows that sales are holding up as serious buyers press ahead with their moving plans.The website found that towns in the North East are among the UK’s most affordable locations. Zoopla’s affordability rankings are based on the 300 popular towns for families looking to buy three bedroom homes. Popularity is based on the number of views per property, and it then ranked these towns by affordability. The “affordable” status is based on them having a low “value-to-earnings” ratio, the equivalent number of years’ salary it would take two adults to buy a home. The top three affordable areas are all in the North East, with Shildon, a quiet town with a rich industrial heritage in County Durham, near Bishop Auckland, coming top of the list with an average price of just £82,500, and a value-to-earnings ratio of 1.36x. Homes in Shildon are three times cheaper than the most affordable towns in the South East.Towns in Northern England, Scotland and Wales all top the affordability rankings but the report noted that every region has affordable towns that are popular with families, with the greatest affordability challenges in southern England. Ferndale, a town and community in the Rhondda Valley, is the most affordable town in Wales with average three bedroom home values of £113,000 and a value-to-earnings ratio of 1.85x. Cumnock, a historic market town in East Ayrshire, south of Glasgow, tops the list in Scotland with an average value of £113,600 and a value-to-earnings ratio of 1.68x. EMPTY HOMES There may be more properties on the market than at this time last year, and areas which are more affordable, but research reveals that large numbers of properties across the UK are lying derelict. National Empty Homes Week is a yearly event organised by the charity Action on Empty Homes to raise awareness of the issue of empty homes and
Richard Donnell , Executive Director. Zoopla
EXPERT COMMENT
As an industry we should be encouraging and supporting
borrowers who are willing to take on vacant or neglected homes. That could mean greater flexibility on property conditions at purchase or exploring partnerships with local authorities where empty homes are a particular issue.
Elliot Vure , Sales Director, Together
EXPERT COMMENT
While some movers may be taking a pause with their homemoving plans amid wider global uncertainty, overall activity has remained resilient. Sales agreed are just 3% below the busy market this time last year and still 15% ahead of 2024 levels. The market is still moving, albeit at a steadier and more considered pace as we head further into spring, despite ongoing global uncertainty.
Colleen Babcock , Rightmove’s property expert
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