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February 2021 Market Update

Updated: Mar 6, 2021


INTRODUCTION


So 2020 is finally done and dusted and we can put what has been a year for the history books behind us, to say the least.


This update will go through some key data points and commentary on what to expect in 2021


KEY STATISTICS


The latest up to date official figures from The Office For National Statistics & HM Land Registry show continued year and year house price growth reflect sales that were agreed towards the end of summer 2020/early Autumn


HOUSE PRICES - Latest UK House Price Index (November 2020)


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 the November 2020 UK HPI will reflect sales agreed in September.


UK


- Average Price UK £249,633 - November 2020

- Annual Price Change 7.6% - November 2020

- Monthly Price Change 1.2% - November 2020


London

- London Average Price = £513,997

- London Annual Price Change = 9.7%

- London Monthly Price Change = 4%



HOUSE PRICES - HALIFAX HPI (January 2021)


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 UK £251,968 - January 2021

- Annual Price Change +5.4% - January 2021

- Monthly Price Change -0.3% - January 2021



TRANSACTIONS (December 2020)


(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, 129,400 - December 2020

- Annual Transaction Volume Change = 31.5% increase - December 2020

- Monthly Transaction Volume Change = 13.1% increase - December 2020


RENTAL MARKET (December 2020)


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 = £979

- Annual Variation for the UK = +2.7% (year on year)

- Average rent in London = £1556

- Annual Variation for London = -4.5% (year on year)

- Rental affordability (single earner in UK) = 31% (10 year average is 32.1%)

- Rental affordability (single earner in London) = 44% (5 year average is 48%)

- Time to rent = 16 days (20 days a year ago)

- Time to rent in London = 17 days



The most popular search terms for rental property also reflect the emphasis on space for renters, with Gardens, Parking, Garage and Balcony, topping the list. The fifth most popular search term is pets, with renters looking for pet-friendly



MORTGAGE MARKET


- There has been increasingly better news for first time buyers


- Data from MoneyFacts found that the number of mortgage deals at a 90% LTV (which requires a 10% deposit) has increased from 88 on 1 December 2020 to 160 on 1 January 2021


- In addition to this, the average rates on both two and five year fixed rate deals at a 90% LTV have fallen month-on-month


- In addition to this, as the below chart shows, the number of deals available at a 75% LTV has risen between 1 December 2020 and 1 January 2021, up from 621 to 629, but there are still 216 fewer deals available compared to the 1 March 2020, when there were 845 75% LTV deals available.

- Overall, product availability is still lower than this time last year, but there are promising signs of a return to the volumes home buyers and investors have been used to seeing.


OTHER NEWS


  • The latest version of the help-to-buy equity loan scheme will be coming into forcer from April this year


  • Despite a debate in amongst MP’s on whether or not the stamp duty holiday should be extended, the end of the holiday is still scheduled for March 31st this year


  • Additionally, coming into force this year, SDLT for overseas buyers will include a Stamp Duty surcharge of 2% for purchases from 1 April 2021.


  • There have been increasing murmurs of a capital gains tax hike as the Chancellor mulls over increasing the tax paid on shares and company assets, from its current level of 28%


  • Knight Frank, Savills and other leading property market operators have predicted house prices to remain flat or grow by a maximum of 1% this year


  • The Halifax HPI has shown signs of the market cooling for the first time since April last year, however house price growth is still very strong on an annual basis

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