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August Property Market Update

INTRODUCTION


Equity in British homes has reached a record high, rental demand is at a 5 year high and mortgage rates remain incredibly low. In this update, we will cover some of these major headlines in more detail.


HOUSE PRICES - UK House Price Index (June 2021)


The UK HPI is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion. Therefore, the price data feeding into this 2021 UK HPI will reflect sales agreed in April.


UK


- Average Price UK £265,668 - June 2021

- Annual Price Change 13.2% - June 2021

- Monthly Price Change 0.9% - June 2021


London

- London Average Price = £510,299 - June 2021

- London Annual Price Change = 6.3% - June 2021

- London Monthly Price Change = 2.5% - June 2021


HOUSE PRICES - HALIFAX HPI (July 2021)


The Halifax HPI provides us with more recent house price data (from mortgage approvals)


The Halifax House Price Index is the UK's longest running monthly house price series with data covering the whole country going back to January 1983


The Halifax uses its own database of approximately 300,000 mortgage approvals per annum (ca. 25% of all mortgages) as a basis for its monthly house price reports. Because it uses approved loans rather than completed mortgages, the Halifax can obtain data earlier than the Land Registry


UK


- Average Price: £261,221 - July 2021

- Annual Price Change: +7.6% - July 2021

- Monthly Price Change +0.4% - July 2021





TRANSACTIONS (June 2021)


(Transactions involving the creation of a new register, such as new builds, are more complex and require more time to process)


- Estimated number of UK residential transactions, 198,240 - June 2021

- Annual Transaction Volume Change = 219% increase - June 2021

- Monthly Transaction Volume Change = 74% increase - June 2021


RENTAL INDEX MARKET (July 2021)


Data is gathered from our tenant referencing service, and our rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs (HomeLet)


- Average rent in UK = £1,029

- Annual Variation for the UK = +6.6% (year on year)

- Average rent in London = £1645

- Annual Variation for London = +2.1% (year on year)

- Household Rent To Income Ratio UK: 30%

- Household Rent To Income Ratio UK: 34%


“The data shows the exceptional growth in rental values, particularly in areas that are within commutable distance to London. Throughout the pandemic, the rate of growth in some regions has more than doubled against previous years” - Homelet


MORTGAGE MARKET


- Between July and August, the number of mortgage deals has increased by 148, from 4,512 to 4,660


  • The average rate on fixed rate mortgages has fallen, with two year fixed rate deals falling from 2.55% in July to 2.52% in August and the average five year fixed deal falling from 2.78% to 2.75% during the same period.


  • For those with just a 5% deposit or equity in their home – which would be a 95% loan-to-value (LTV) mortgage deal – the average rate on a two year fixed deal has fallen by 0.10% month-on-month, down from 3.79% in July to 3.69% in August


- NatWest has announced a series of further rate reductions to its residential purchase and remortgage ranges for new customers. Amongst the changes is a five-year fixed rate at 60% LTV which has been cut by 5bps to 0.99% with a £995 fee.



OTHER NEWS


  • Stamp duty and enveloped dwellings taxes earned £5.7bn for HMRC from April to July this year, new figures show. The figure is £2.2bn higher than the same period in 2020. In July alone, £1.3bn was generated in stamp duty tax, the highest month on record for stamp duty receipts.


  • Rental prices in the capital increased by 25.9 per cent between 2011 and 2017, while wages rose by just 9.1 per cent over the same period


  • Nationwide is piloting a new voice-tech service to assist home buyers search for a property. Users can explore the 20 most popular areas in a city by using voice commands & listen to the stories behind the areas through short audio documentaries voiced by local people.


  • Equity in British homes has reached a record high. Almost £730 billion of equity now sits in British property The sum, assessed during the second quarter of 2021, is an increase of almost £80 billion when compared to the previous quarter.


  • The most unaffordable place to buy a property in the UK is no longer London. It is now the affluent Hampshire cathedral city of Winchester where a typical home costs 14 times the city’s average income of £45,000.


  • According to research from Propertymark, the housing stock has been steadily declining since January - The average estate agency branch has approximately 23 properties, a 38% decrease from June 2020 and a 40% decrease since January 2021.


  • In June, 40% of properties sold for more than the original asking price. This is a jump from May when 33% of properties sold for more than the original asking price and the highest figure ever on record.

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