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March 2022 Property Market Update

INTRODUCTION


Asking prices reached a record high in March and annual house price growth is still sat in double digits. The cocktail of low interest rates, seasonal demand and consumer confidence in the market is still propping up prices. The government has increased interest rates to 0.75% to cool demand, but experts are still predicting house price growth to continue at a similar rate this year.


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 £273,7622 - January 2022

- Annual Price Change 9.6% - January 2022

- Monthly Price Change 0.4% - January 2022


London


- London Average Price = £510,102 - January 2022

- London Annual Price Change = 2.2% - January 2022

- London Monthly Price Change = -1.8% - January - 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: £278,123 - February 2022

- Annual Price Change: +10.8% - February 2022

- Monthly Price Change +0.5% - February 2022


RENTAL INDEX MARKET (October 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 = £1,069

- Annual Variation for the UK = +8.6% (year on year)

- Average rent in London = £1,757

- Annual Variation for London = +11.8% (year on year)

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


“The second month of 2022 followed largely similar trends to the first, with the average rental price across the UK continuing to rise month-on-month. The housing supply required to meet the demand sadly isn’t there, so as far as we can tell, this is a trend that will continue to appear throughout 2022, barring an unexpected change” - Homelet


News


  • UK property buyers paid a record £16.9bn in stamp duty tax between April 2021 and February 2022, a £6.1bn increase compared to the previous tax year


  • Residential property transactions grew by 15.3% on a monthly basis in February 2022, official government figures show.


  • Rightmove's data reveals that this month’s 1.7% (+£5,760) average asking price increase to £350,000 is the largest at this time of year since March 2004.


  • The Bank of England's decision last week to raise the base rate to 0.75% is a step closer to normality for the UK housing market, according to the latest insight from Knight Frank. The last time the rate was as high was in March 2020, before the pandemic triggered a prolonged stamp duty holiday, a supply squeeze and double-digit house price growth


  • Over 19,000 UK homeowners regretted buying their property last year, with just under half saying that the main reason for this was that they found a number of problems with their home they weren’t aware of before moving in


  • The price of home improvement skyrocketed by 17% in January, with the average person paying an extra £379 for home improvements last month, versus prices paid in 2021, according to the latest data from Checkatrade


  • Construction lifted by 1.1% in January compared to the previous month driven by repair and maintenance work, according to the Office for National Statistics (ONS). It added that building activity is now at its highest level since September 2019.


Mortgage Market News


  • The latest rates increase by the Bank of England will add almost £1,000 a year onto average home loans, according to data from Trussle. The online mortgage broker says the Bank’s interest rates increase today to 0.75% from 0.5%, will add a further £316.56 to average home payments on standard variable rates.


  • Seven out of 10 portfolio landlords expect to remortgage or consolidate loans over the next 12 months, according to a poll by CHL Mortgages. The intermediary-only BTL lender surveyed more than 100 specialist BTL brokers who said around 70% of their portfolio landlords clients were in this position.


  • February saw £138.4m of second charge lending take place, reports Loans Warehouse, which it says is a new post-credit crunch record. This also means that second charge lending grew from £111.4m in January and by 83% on an annual basis.


  • The majority of brokers are confident that this year will see an increase in bridge loan lending, a survey from Glenhawk shows. Of the 100 brokers asked, 84% said they anticipate writing more business, with only 14% responding in the negative.


  • The value of new mortgage commitments in the final quarter of last year dropped by 11.9% on an annual basis, totalling £77.3bn, show new figures from the Bank of England (BoE). “We are likely to see a further increase in base rate and with the bigger lenders starting to raise their mortgage rates, borrowing costs are set to edge up across the board”

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