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August/September Property Market Update 2022

INTRODUCTION


  • Despite year on year house price increases in the double digits, the market seems to be cooling down. Increased interest rates, seasonal slowing down and a slightly cautious market sentiment have all pointed towards a quieter market in the months ahead


  • This report looks into the data in more detail


HOUSE PRICES


UK House Price Index


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 2022 UK HPI will reflect sales agreed in April.


UK


- Average Price UK £286,397- June 2022

- Annual Price Change +7.8% - June 2022

- Monthly Price Change +1% - June 2022


London


- London Average Price = £537,920 - April 2022

- London Annual Price Change = +6.3% - April 2022

- London Monthly Price Change = -+1.9% - April 2022


HOUSE PRICES - HALIFAX HPI


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: ££294,260 - August 2022

- Annual Price Change: +11.5% - August 2022

- Monthly Price Change +0.4% - August 2022





TRANSACTIONS - UK House Price Index


In June 2022, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 95,420. This is 54.3% lower than a year ago (June 2021).


Between May and June 2022, UK transactions decreased by 7.9% on a seasonally adjusted basis


RENTAL INDEX MARKET (March 2022)


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 = £1,143

- Annual Variation for the UK = +8.5% (year on year)

- Average rent in London = £1,898

- Annual Variation for London = +10.8% (year on year)

- Household Rent To Income Ratio UK: 35% (single earner)


“We expect rental prices for new tenancies will continue to increase. It’s a challenging position for both landlords and tenants. Whilst landlords’ cost bases are being squeezed, tenants’ living costs are only getting worse.” - Homelet


News


  • House prices in London have grown at the fastest pace in six years, as workers flocked back to offices in the capital. Property prices in London grew 8.8pc compared to last year, with the average home in the city now standing at £554,718, almost double the national average of £294,260


  • Six of Britain’s biggest banks agreed to offer mortgages on buildings with fire safety defects, freeing owners trapped in previously unsellable homes. Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander will lend on flats in blocks with cladding, on the condition the properties are entitled to funding to fix safety faults.


  • Greater interest in energy efficient homes was evident in a 34% rise in searches that consider a property’s energy performance certificate (EPC) rating in July, says Legal & General Mortgage Club.


  • Liz Truss has become the new prime minister today (5 September), replacing Boris Johnson. She garnered 81,326 Conservative votes, while her opponent Rishi Sunak received 60,399.


  • Brokers are calling for new regulation to correct the new build and mortgage markets that are “chaotically out of sync”, putting buyers under pressure to exchange contracts within 28 days on homes that may not be completed for 12 months, exposing them to rates that have more than doubled in a year



Mortgage Market News


  • The Bank of England Monetary Policy Committee voted on 4 August 2022 to increase the Bank of England base rate to 1.75% from 1.25%


  • At the close of July there were 4,409 residential products for brokers to choose from; a number that, by the end of August, had shrunk to 3,918


  • The overall five-year fixed average has gone up by 0.16% since the first of this month to 4.24%, a rise of 1.60% compared to December 2021


  • In July, the average shelf life for a mortgage was just 17 days; in June this stood at 21 days.


  • Since the start of September 2022, the overall average two-year fixed rate has already increased by 0.14% and has now reached 4.09%. According to our first-of-month averages, this is the first time that this rate has breached 4% since February 2013

INTRODUCTION


  • Despite year on year house price increases in the double digits, the market seems to be cooling down. Increased interest rates, seasonal slowing down and a slightly cautious market sentiment have all pointed towards a quieter market in the months ahead


  • This report looks into the data in more detail


HOUSE PRICES


UK House Price Index


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 2022 UK HPI will reflect sales agreed in April.


UK


- Average Price UK £286,397- June 2022

- Annual Price Change +7.8% - June 2022

- Monthly Price Change +1% - June 2022


London


- London Average Price = £537,920 - April 2022

- London Annual Price Change = +6.3% - April 2022

- London Monthly Price Change = -+1.9% - April 2022


HOUSE PRICES - HALIFAX HPI


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: ££294,260 - August 2022

- Annual Price Change: +11.5% - August 2022

- Monthly Price Change +0.4% - August 2022





TRANSACTIONS - UK House Price Index


In June 2022, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 95,420. This is 54.3% lower than a year ago (June 2021).


Between May and June 2022, UK transactions decreased by 7.9% on a seasonally adjusted basis


RENTAL INDEX MARKET (March 2022)


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 = £1,143

- Annual Variation for the UK = +8.5% (year on year)

- Average rent in London = £1,898

- Annual Variation for London = +10.8% (year on year)

- Household Rent To Income Ratio UK: 35% (single earner)


“We expect rental prices for new tenancies will continue to increase. It’s a challenging position for both landlords and tenants. Whilst landlords’ cost bases are being squeezed, tenants’ living costs are only getting worse.” - Homelet


News


  • House prices in London have grown at the fastest pace in six years, as workers flocked back to offices in the capital. Property prices in London grew 8.8pc compared to last year, with the average home in the city now standing at £554,718, almost double the national average of £294,260


  • Six of Britain’s biggest banks agreed to offer mortgages on buildings with fire safety defects, freeing owners trapped in previously unsellable homes. Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander will lend on flats in blocks with cladding, on the condition the properties are entitled to funding to fix safety faults.


  • Greater interest in energy efficient homes was evident in a 34% rise in searches that consider a property’s energy performance certificate (EPC) rating in July, says Legal & General Mortgage Club.


  • Liz Truss has become the new prime minister today (5 September), replacing Boris Johnson. She garnered 81,326 Conservative votes, while her opponent Rishi Sunak received 60,399.


  • Brokers are calling for new regulation to correct the new build and mortgage markets that are “chaotically out of sync”, putting buyers under pressure to exchange contracts within 28 days on homes that may not be completed for 12 months, exposing them to rates that have more than doubled in a year



Mortgage Market News


  • The Bank of England Monetary Policy Committee voted on 4 August 2022 to increase the Bank of England base rate to 1.75% from 1.25%


  • At the close of July there were 4,409 residential products for brokers to choose from; a number that, by the end of August, had shrunk to 3,918


  • The overall five-year fixed average has gone up by 0.16% since the first of this month to 4.24%, a rise of 1.60% compared to December 2021


  • In July, the average shelf life for a mortgage was just 17 days; in June this stood at 21 days.


  • Since the start of September 2022, the overall average two-year fixed rate has already increased by 0.14% and has now reached 4.09%. According to our first-of-month averages, this is the first time that this rate has breached 4% since February 2013


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