Housing markets face regulatory and economic shifts in UK and Australia

The housing and mortgage markets in the United Kingdom and Australia are facing significant regulatory and economic shifts. In the UK, property body Propertymark has warned that rent controls could reduce housing supply by encouraging landlords to sell, citing historical data from San Francisco and Berlin. Additionally, Propertymark cautioned that a new Private Rented Sector (PRS) Database under the Renters’ Rights Act could increase administrative burdens and costs for landlords and agents without necessarily improving standards.

Further UK reforms include a proposed ground rent cap of £250 per year for 40 years, which the government estimates could transfer up to £12.7 billion from freeholders to leaseholders. Meanwhile, mortgage market data from Twenty7tec shows that while residential remortgage searches rose by 7% in July, buy-to-let searches declined as landlords weigh taxation, regulation, and borrowing costs.

In Australia, prospective homebuyers are facing increased challenges despite falling property prices. Mortgage brokers report that cumulative interest rate rises have reduced borrowing capacity, and the Commonwealth Bank noted a 15% drop in new mortgage applications since May. Although the Reserve Bank kept the cash rate steady at 4.35%, cost-of-living pressures and higher rates continue to impact affordability for first-time buyers.