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October 2021 Property Market Update

INTRODUCTION


Incredibly low mortgage rates, a slow down in the house price growth rate and significant rental price growth have defined the UK property market over the last few weeks. This market update delves into these stories 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 2021 UK HPI will reflect sales agreed in April.


UK


- Average Price UK £255,535 - July 2021

- Annual Price Change 8% - July 2021

- Monthly Price Change -3.7% - July 2021


London


- London Average Price = £494,673 - July 2021

- London Annual Price Change = 2.2% - July 2021

- London Monthly Price Change = -2% - July - 2021


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: £267,587 - October 2021

- Annual Price Change: +7.4% - October 2021

- Monthly Price Change +1.7% - October 2021


TRANSACTIONS (Auust 2021)


The provisional seasonally adjusted estimate of UK residential transactions in August 2021 is 98,300, 20.8% higher than August 2020 and 32.0% higher than July 2021




RENTAL INDEX MARKET (September 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 = £1,061 (RECORD HIGH)

- Annual Variation for the UK = +7.5% (year on year)

- Average rent in London = £1752

- Annual Variation for London = +6.4% (year on year)

- Household Rent To Income Ratio UK: 30%

- Household Rent To Income Ratio UK: 33%


“UK rents are up by 9.7% on pre-pandemic levels (2019), but most of the increases have happened this year. At first, we saw rents outside London surge whilst prices in the capital dipped, but we’re now seeing rents in London rise much more rapidly, fueling the record rental levels we see across the country.” - Homelet


MORTGAGE MARKET


  • Average mortgage rates have continued to fall month-on-month, but with experts suggesting the Bank of England base rate may rise next year, borrowers coming to the end of their current fixed rate deal, or on their lender’s standard variable rate (SVR), are being urged to lock into a new deal now..


  • Buy-to-let purchases made by older landlords nearing retirement jumped by more than half following the reopening of the housing market, according to data from Paragon Bank.


  • There was a 52% rise in BTL sales made to landlords aged between 60 and 64 in the year to the end of June compared to the same period the year before, following the introduction of the stamp duty holiday last summer. This rise was more than any other age bracket.


  • Mortgage product choice has improved for the 12th consecutive month with a further 127 deals added, taking the total to 4,939.


  • Although product numbers remain slightly below pre-pandemic levels of 5,222 in March 2020, the number of deals has more than doubled compared to a year ago.


  • Two out of ten landlords use a credit card or other short-term debt to refurbish their properties, according to Shawbrook Bank.



OTHER NEWS


  • Many city centres saw double digit rental price growth in the third quarter of this year, shows new data from Rightmove


  • Record house prices mean the average UK home will jump by 30% over the next decade to hit £323,718, according to forecasts by Comparethemarket.com.


  • Prices in Greater London are predicted to lift 33% to £619,568 by 2031, says the price comparison site, which used Office for National Statistics house price data going back to 1992 combined with its own forecasting model.


  • The average UK home rose at its fastest monthly rate since 2007 in September, increasing by 1.7% to a record £267,587 and by 7.4% year on year, according to the latest Halifax House Price Index.


  • English councils will be handed almost £58m to build 5,600 homes on brownfield sites for sale to young people and families, the government says.


  • Last year the country built 244,000 new homes – the highest number of new homes for over 30 years.

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