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September 2021 Property Market Update

INTRODUCTION


The housing market is still showing no sign of slowing; with house price growth maintaining a consistent level throughout the year. First time buyers are rushing back into cities to buy their first homes and mortgage rates continue to reach historic lows. Find out more about these stories in this month’s property market report.


HOUSE PRICES - UK House Price Index (June 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 this 2021 UK HPI will reflect sales agreed in April.


UK


- Average Price UK £265,668 - June 2021

- Annual Price Change 13.2% - June 2021

- Monthly Price Change 0.9% - June 2021


London


- London Average Price = £510,299 - June 2021

- London Annual Price Change = 6.3% - June 2021

- London Monthly Price Change = 2.5% - June 2021


HOUSE PRICES - HALIFAX HPI (September 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: £262,954 - September 2021

- Annual Price Change: +7.1% - September 2021

- Monthly Price Change +0.7% - September 2021


TRANSACTIONS (Quarter 2 2021)


The provisional non-seasonally adjusted estimate for UK residential transactions in 2021 quarter 2 of 429,290 is the highest quarter 2 total since the introduction of these statistics in April 2005


RENTAL INDEX MARKET (August 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 = £1,053

- Annual Variation for the UK = +6.9% (year on year)

- Average rent in London = £1713

- Annual Variation for London = +3.6% (year on year)

- Household Rent To Income Ratio UK: 30%

- Household Rent To Income Ratio UK: 34%


“On the whole, the private rented market has been exceptionally resilient throughout the pandemic, so it’s no surprise that the level of investment is increasing through sectors like build to rent. Consistent yields over the long term coupled with capital appreciation have only bolstered confidence in the industry even in the face of the disruption we’ve had over the past 18 months.” - Homelet


MORTGAGE MARKET


  • Average mortgage rates for two- and five-year fixed deals have seen the greatest decline in a single month since May 2020.


  • The latest average rate for a two year fixed mortgage is 2.38%, a reduction of 0.14%, with a five year deal average of 2.63%, a 0.12% fall.


  • There are 72 two year fixed and 29 five year fixed rate mortgages at below 1%.


  • Consumers looking to capitalise on the increase in UK-based holidays will be pleased to see that more lenders have entered this niche mortgage market.


  • Over the past six months, four more lenders have started offering holiday let mortgage deals, up from 21 lenders in April to 25 lenders this month. During this time, the number of holiday let mortgage deals has also risen, increasing from 149 to 186.


OTHER NEWS


  • Scotland has overtaken London as the fastest moving market for million-pound properties, with homes finding a buyer in 61 days on average, 25 days quicker than before the pandemic, according to new research by Rightmove.


  • The material crisis is harming the Government’s housebuilding and construction ambitions and the sector needs to help


  • The total amount of UK rent paid by tenants has slid by 8% from a peak of £62.4bn in 2018 down to £57.3bn this year, according to Hamptons.


  • The Millennial rent bill has plummeted by 28% over the last three years from £33.3bn in 2017 to £24.0bn this year.


  • Following the wind-down of the stamp duty holiday at the end of September, activity levels in the UK property market are predicted to remain high. The number of new prospective buyers registering during August was up 24% against the five-year average.


  • Despite the ongoing pandemic, 67% of those taking their first step onto the property ladder have chosen metropolitan areas over countryside locations, and 77% are prioritising transport links when searching for their first homes.


  • The government has announced the allocation of £8.6 billion of funding in the first round of its five-year Affordable Homes Programme, with the funds set to deliver around 119,000 homes through nearly 90 new “strategic partnerships”.

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