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May 2022 Property Market Update

INTRODUCTION


The London market is still on a roll, with both house prices and rental prices reaching record levels. Mortgage rates are beginning to rise across the board and inflation is steaming ahead to record levels. This month’s market reports covers all of these economic metrics 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 £278,436 - March 2022

- Annual Price Change 9.8% - March 2022

- Monthly Price Change 0.3% - March 2022


London


- London Average Price = £523,666 - March 2022

- London Annual Price Change = 4.8% - March 2022

- London Monthly Price Change = -0.9% - March - 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: £282,753 - April 2022

- Annual Price Change: +10.8% - April 2022

- Monthly Price Change +1.1% - March 2022


TRANSACTIONS - UK House Price Index


The provisional seasonally adjusted estimate of UK residential transactions in March 2022 is 114,650, 35.7% lower than March 2021 and 2.6% higher than February 2022.


The provisional non-seasonally adjusted total of UK residential transactions during 2021 to 2022 is the highest financial year total since 2007 to 2008.


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 = £1,091

- Annual Variation for the UK = +9.5% (year on year)

- Average rent in London = £1,804

- Annual Variation for London = +14.2% (year on year)

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


“A broader analysis of the Rental Index data confirms that the demand for rental properties is continuing to outweigh supply massively, which will surely lead to continued price rises to differing extents across the country” - Homelet


News


  • More than a quarter (27%) of those who moved at the height of the pandemic are now regretting their decision two years on, according to a survey by online mortgage broker Trussle.


  • Average asking prices in the UK have hit a new record for the fourth consecutive month, rising to £367,501, the latest data from Rightmove’s house price index shows.


  • New home registrations in the UK have increased by 25% in the first quarter of 2022 compared to the same period last year, according to new data released by the National House-Building Council (NHBC).


  • Inflation in the UK climbed to 9% in April, the sharpest rise in 40 years, according to the Office for National Statistics (ONS).


  • The average rent has risen by 11% in the UK over the past year according to Zoopla’s latest market index. This means that the average rent paid by tenants is now £995 a month, compared to £897 last year


  • Second charge lending jumped to £140.4 million in April compared to a year ago, according to Loans Warehouse. Last month’s year-on-year figures lifted 80.9% on April 2021, says the firm based on data reported directly to it from second charge lenders.


  • House prices in rural areas have risen at a significantly faster rate than those in urban regions over the past five years, according to the latest data from Nationwide Building Society. Its figures show that house prices in rural areas have risen by 29% over the last five years, compared to just an 18% increase in predominantly urban areas.


Mortgage Market News


  • Santander for Intermediaries will launch 95% loan-to-value mortgages that lie outside the government’s mortgage guarantee scheme on 1 June


  • One in five homeowners have abandoned a remortgage application in the last two years because of delays and technical problems.


  • The overall stock of outstanding interest-only mortgages fell by 15% in 2021, compared to the end of 2020, according to UK Finance’s interest-only mortgage data


  • Average rates for products in the buy-to-let (BTL) sector are increasing, shows data from Moneyfacts. The firm has issued a report showing that, on a monthly basis, the average rate for a two-year fix at all LTVs rose from 3.22% to 3.41%, while for a five-year fix at all LTVs, the average rate moved up from 3.42% to 3.56%


  • Moneyfacts also points out that product choice remains high: options dipped by only a small number on a monthly basis, from 3,435 to 3,374. And a year ago, in May 2021, Moneyfacts counted 2,302 products on the market.


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