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July Property Market Update

INTRODUCTION


The stamp duty holiday has finally come to an end, transaction numbers have unsurprisingly hit a record high and commercial high street giants are investing in the residential market. These are just a few of the stories that have grabbed the headlines this month, but let’s take a deeper look into the data.


HOUSE PRICES - UK House Price Index (March 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 the May 2021 UK HPI will reflect sales agreed in March.


UK


- Average Price UK £254,624 - May 2021

- Annual Price Change 10% - May 2021

- Monthly Price Change 0.9% - May 2021


London

- London Average Price = £497,948 - May 2021

- London Annual Price Change = 5.2% - May 2021

- London Monthly Price Change = 0.7% - May 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: £260,358 - July 2021

- Annual Price Change: +8.8% - July 2021

- Monthly Price Change -0.5% - July 2021




TRANSACTIONS (March 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 (May 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 = £1,007

- Annual Variation for the UK = +5.9% (year on year)

- Average rent in London = £1607

- Annual Variation for London = +1.5% (year on year)

- Household Rent To Income Ratio UK: 30%

- Household Rent To Income Ratio UK: 34%


“In simple terms, increased costs for landlords mean increased costs for tenants. Some landlords have exited the market whilst the stamp duty holiday has stimulated the sales market, impacting the stock level. These are all factors driving an increase in rental values for new tenancies, which are way above the rate of inflation.” - Homelet


MORTGAGE MARKET


- Nationwide Building Society is launching a sub-1% five-year fixed rate mortgage at 60% LTV for homemovers and remortgagors. The new product, which launches on Wednesday, is available at 0.99% with a £1,499 fee.


  • Mortgage Advice Bureau has launched the Home Buying App after its research found that 89% of advisers think first-time buyers need more education on property purchases and mortgage applications


  • 52% of UK adults aged 18-34 say they have a fairly or very bad understanding of the whole mortgage process from beginning to end, according to a survey by Paymentshield.


- Data from Moneyfacts shows that as of the start of June 2021, there were 4,243 mortgages for potential borrowers to choose from, up from 3,927 at the start of May 2021.


- In June 2020, there were just 2,810 mortgages on the market.


- As well as choice improving overall, the number of 95% LTV mortgages on the market increased from 112 in May to 192 in June.


- Over the course of the past month, 33 new two-year fixed rate products were launched [at 95% LTV], seeing the average fixed rate drop by a substantial 0.14% [since May] to 3.88%.



OTHER NEWS


  • Boots is the latest company to dip its toe into the water of the property sector. Modular housing company ilke Homes has been selected by Boots to deliver a 622-home scheme at Beeston in Nottingham.


  • Earlier this month the John Lewis Partnership released details of an ambitious plan to build and furnish private rental properties. In a bid to shore up its flagging retail reputation and income, the company wants to build some 10,000 rental units.


  • Asking prices are at a new record high. The new all-time high asking price of £338,447 was up 0.7pc on the previous month, despite the anticipated typical summer lull. This was the largest monthly rise at this time of year since July 2007. Annual growth in asking prices was 5.7%


  • Analysis of Land Registry data found that the average UK homeowner has seen a cash boost of £23,116 in just 12 months, with the average UK house price climbing from £231,508 in May of last year, to £254,624 in May 2021


  • Half of UK home-buyers who agreed on a sale between March 2020 and June 2021 say they regret how much they paid for their properties compared to just 12% who bought their property before February 2017, according to new market analysis from Aviva.


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