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October 2022 Property Market Update

INTRODUCTION


  • To say that the last few weeks in the property market have been eventful would be an understatement. From carnage in the mortgage market to carnage at No.10 Downing Street to carnage in the wider economy - the last quarter of 2022 has gotten off to a crazy start.


  • This report will cover the latest headlines & key market 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 £295,903- August 2022

- Annual Price Change +13.6% - August 2022

- Monthly Price Change +0.9% - August 2022


London


- London Average Price = ​​ - £552,755 August 2022

- London Annual Price Change = +8.3% - 2022

- London Monthly Price Change = +0.9% - 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: £293,835 - September 2022

- Annual Price Change: +9.0% - September 2022

- Monthly Price Change -0.1% - September 2022





TRANSACTIONS - UK House Price Index


In August 2022, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 104,980.


This is 7.6% higher than a year ago.


Between July and August 2022, UK transactions increased by 1.1% on a seasonally adjusted basis.


RENTAL INDEX MARKET (September 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 = £1,159

- Annual Variation for the UK = +9.2% (year on year)

- Average rent in London = £1,945

- Annual Variation for London = +11% (year on year)

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


“The rising cost of living is likely to see more tenants unable to afford their rent payments, and spiraling mortgage rates are making things harder for landlords. Several factors are combining to result in more and more landlords leaving the market, sadly depleting an already inadequate supply of rental properties to meet tenants’ demand”


News


  • Inflation in the UK was 10.1% in September, the latest data from the Office for National Statistics (ONS) shows.


  • First time buyers will now pay no stamp duty up to £425k. First Time Buyer relief qualification threshold is now £625k (previously £500k). No stamp duty payable for home buyers up to £250k


  • Britain’s biggest housebuilder Barratt has reported a slump in reservations of new homes in recent weeks, as the housing market is hit by economic uncertainty and rising mortgage rates


  • Last week, Liz Truss announced Section 21 (S21) notices, also known as no-fault evictions, will now be scrapped. S21 is part of the 1988 Housing Act, which was introduced to Parliament by the Thatcher government and greatly shifts power in favour of private landlords


  • The Bank Of England Base rate rose to 2.25%


  • The number of homes for sale in estate agent branches has leapt by half since April, according to trade body Propertymark


  • The average price of property coming to the market rises by 0.9% (+£3,398) in the month to a new record of £371,158 This 0.9% rise is a softening from the five-year average rise in October of 1.2%


  • Estate agents have reported that buyers are paying an average of 15.5% more for a home that meets high energy efficiency standards, with a third of buyers paying more than 20% extra in their area



Mortgage Market News



  • More than two million homeowners with fixed-term loans will remortgage between now and the end of 2024


  • In October 2021 the average two and five year fixed rates stood at 2.25% and 2.55% respectively. One year later and these rates have more than doubled.


  • Many major high street lenders have pulled their mortgage products in light of interest rate volatility and the uncertainty of the UK’s economic outlook. Mortgage product choice dropped from 3,961 in mid September to 2340 by the end of September.


  • Generation Home has reintroduced its range of mortgage products up to 95% loan-to-value (LTV) with rates starting from 6.23%


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