Fine & Country National Housing Market Update | January2021

DOMVSproperties

2021 marks the start of the UK’s journey as an independent trading nation. The vaccine programme is well underway and an end to the pandemic is finally in sight. We enter 2021with a strong housing market following a remarkable recovery from the first lockdown.

JANUARY 2021

NATIONAL HOUSING MARKET UPDATE


K E Y S T A T S

E N G LA ND AN D WAL ES

£724,000 £1,092,864 9.19%

£624 £35.8bn 12,350

LATEST DATA QUARTERLY CHANGE ANNUAL CHANGE

MORTGAGE APPROVALS 104,969 52.4% 61.2%

RESIDENTIAL TRANSACTIONS 115,190 46.9% 19.3%

GROSS MORTGAGE LENDING £23.2 bn 24.8% 4.6%

NEW HOME STARTS (QT) 12,950 -52.0% -59.2%

NEW HOME COMPLETIONS (QT) 14,050 -54.4% -62.2%

2 I PREMIUM MARKETS I NATIONAL


M A R K E T O V E R V I E W

2MOVING 0 1 8 - THINTO E YE AA R NEW TH AT YEAR

WAS

Although 2021 marks the the festive start season of the is UK’s upon journey us, there as is an little independent seasonal cheer trading and nation. ‘good will The to vaccine

all’

evident programme across is the well political underway arena. and Brexit an end continues to the pandemic to dominate is finally the headlines sight. We as enter all eyes 2021

await with a the strong final housing outcome. market Whatever following the conclusion, a remarkable there recovery are sure from to be the implications first lockdown.

for

sterling and the economy. As 2018 draws to a close, are we any closer to predicting what

we can expect in 2019?

A FRESH START

ECONOMIC RECOVERY

The UK voted to leave the EU in 2016 and officially left the

trading bloc on 31st January 2020. The vaccine rollout has

begun, the first dose of the Pfizer vaccine was given on 8th

December GLIMMERS 2020 OF and SEASONAL the first dose of CHEER the Oxford/AstraZeneca

vaccine Throughout received 2018 on sales 4th volumes January 2021. across With the housing the vaccine market rollout

under have struggled, way and a thanks Brexit to deal the agreed, backdrop 2021 of lower is looking buyer far more

optimistic despite a new lockdown.

demand and low levels of consumer confidence. However,

latest data from the Bank of England indicates mortgage

The approvals housing October market has were all but 4% recovered higher than following a year ago, the while forced

closure the total in value spring of 2020. lending Mortgage hit its highest approvals monthly are only figure down

since

-0.9% the surge (January in transactions to November prior 2020) to the compared introduction to the of the same

period additional in 2019 3% SDLT (Bank levy of England) in March and 2016. according More sales to Zoopla,

took

new place sales across agreed the UK in 2020 in October were 9% than above in any 2019. month The since remarkable

July

recovery 2017, while was Rightmove thanks to data households shows properties re-evaluating 2018 their to housing

requirements date have taken and an fuelled average by of the 61 stamp days from duty the holiday.

start of

marketing to being sold-subject-to-contract, one day

shorter than last year and an improvement on the 65 days

A STRONG END TO THE YEAR

witnessed in 2016.

2020 Despite

ended the rise

with in

a the

strong UK

housing base rate

market. in the summer,

Demand in 2020

was mortgage 40% higher interest than rates in 2019 remain and low. although UK Finance demand report has slowed

that

since at 2.23% summer, the current it remains average 33% mortgage higher than interest last December, rate is lower a

previous than the rate peak both following five and the ten general years election ago, 3.14% (Zoopla).

and 6.11%

respectively. Adjusting for inflation, wages have risen over

104,969 the past mortgages year, positive were news approved for household in November finances. 2020, the

highest since August 2007, pre-Global Financial Crisis (Bank of

England). The number of transactions continued to rise with

SENSE AND SENSIBILITY

115,190 sales recorded in November 2020, 19.3% higher than

November Sensible pricing 2019 remains (HMRC). crucial An estimated to achieving 650,000 a sale. properties

The

are average still changing asking price hands of a (Rightmove) property fell and by therefore 1.7% in November, transaction

figures the largest will continue November to fall increase since 2012 in early according 2021.

to

Rightmove, while annual house price growth has moderated

With throughout demand the outweighing year. Annual supply, house house price prices growth rose across throughout

the

2020. UK in Nationwide the year to September reported a was 7.3% 3.5%, annual down increase from in 4.6% house

a

prices year ago, in December according to 2020, the official the strongest UK House house Price price Index. growth in

six Average years. prices House across prices London ended remain the year slightly 5.3% lower above than the level

a

prevailing year ago, the in March, capital when currently the feeling pandemic the struck brunt of the Brexit UK.

uncertainty.

The UK economy has been recovering from a record slump

earlier this year when the UK faced its first lockdown.

The economy was 7.9% (ONS) smaller in October than it

Across the UK prime markets, the average price of property

had been pre-lockdown, and recovery in November and

is down a fraction on a year ago. However, across many

December is expected to have slowed as increased UK

assets 2018 has not proved momentous. In the year to the

restrictions were put in place. Now that the UK has officially

end of November the average price of gold has fallen by

left over

the EU 1%,

and the

the stock

vaccine market

programme (FTSE 100)

is by

underway, 6%, while

we

the S&P

hope Global

to see Luxury

continued Index

recovery is 5.5% lower

of the than

economy a year

throughout

ago, despite

2021. fine The wines Financial and classic Times cars Survey boasting of 90 small leading positive economists

returns.

expects Many it commentators will take least report 18 months evidence for of the pent-up UK economy

demand

to return for higher to its priced pre-pandemic properties, size

with prospective vendors

waiting for more clarity before they commit to their

purchase.

THE YEAR AHEAD

2021 will be host to a lot of housing market changes and

A CRYSTAL BALL

deadlines. The stamp duty holiday is set to finish at the end

of March 2021, the same deadline for Help to Buy changes.

A 2% surcharge for overseas purchasers will be introduced

from and 1st the April EU. and The potential Governor changes of the to Bank Capital of England, Gains Tax

Mark

are set to be introduced. These changes will no doubt

impact transaction volumes and house prices.

Unsurprisingly all current forecasts for 2019 are issued with

a caveat relating to a deal being brokered between the UK

Carney, has reiterated his forecast that in the event of a nodeal

Brexit the economy may fall by over 8% and average

house prices by up to 30%. Current forecasts from the

House Office price for forecasts Budget Responsibility for 2021 range point from to mildly employment positive

levels

to greatly continuing negative, to rise reflecting 2019, along uncertainties with average facing earnings, the

while

economy inflation and is predicted the housing to market. edge back The to Dataloft the government’s consensus

2.0%

house target. price This forecast, may well based require on the a gradual average rise from in interest five leading

rates,

commentators, although the

expects current view

0.9% is

growth that the

in base

2021. rate

The will

Office rise to

for

Budget just 1.5

Responsibility – 1.75% by

(OBR) 2021.

forecast 1,111,000 residential

transactions Across the to housing complete market, in the as year per to 2018, March many 2021, rising to

1,279,000 commentators in the year expect to March the wider 2022.

UK market to outperform

London. An average of independent forecasts predicts price

growth across the UK will be 2.2% during 2019. In

comparison, those commentating on the London market

anticipate 2019 may well prove another year of falling

prices. Compound growth across the UK is anticipated to

be in the region of 11% – 14% over the next five years.

Forecasts for London vary widely, from less than 5% to over

10%. Only time will tell which trajectory is more likely to be

true.

PREMIUM MARKETS I NATIONAL I 3


R E G I O N A L

P R E M IU M M A RK E TS : TOP 5 %

£430,000

£590,964

+3.2%

£310

£478,000

£635,242

+1.9%

£316

£356,000

£475,632

+4.2%

£242

£421,000

£567,086

+3.5%

£291

£448,000

£584,621

+3.6%

£278

£393,000

£510,248

+6.2%

£276

£705,000

£959,243

+4.6%

£470

£620,000

£845,902

+5.1%

£397

£849,000

£1,207,616

+9.0%

£495

£1,570,000

£2,581,875

+14.0%

£1,284

4 I PREMIUM MARKETS I NATIONAL


N A T I O N A L

P R E M IU M M A RK E TS : TOP 5 %

PROPERTIES SOLD ABOVE THE

PREMIUM PRICE THRESHOLD

The premium price threshold is

the value over which the top 5%

of property sales occur. The chart

shows a rolling 12 month change

in the average price paid for

premium properties compared

to the previous 12 month.

ENGLAND & WALES

10%

7.5%

5%

2.5%

0%

-2.5%

DEC

2019

JAN

2020

FEB

2020

MAR

2020

APR

2020

MAY

2020

JUN

2020

JUL

2020

AUG

2020

SEP

2020

OCT

2020

NOV

2020

Source: Dataloft, Land Registry

BY PROPERTY TYPE OVER THE

LAST 12 MONTHS, PROPERTIES

SOLD ABOVE THE PREMIUM

PRICE THRESHOLD

ENGLAND & WALES

£1,600

An individual premium price

threshold is calculated for each

property type based on sold

prices in the last 12 months. The

chart shows the average price paid

per square foot for all of these

premium properties.

£1,200

£800

£400

£1222

£690

£516 £509

£624

0

FLAT/APARTMENT TERRACED SEMI-DETACHED DETACHED ALL PROPERTY

Source: Dataloft, Land Registry

PREMIUM MARKETS I NATIONAL I 5


T R A N S A C T I O N S

A N D K EY P RI C E P O IN T S

ALL PROPERTIES SOLD ACROSS

THE COUNTRY

Chart shows a rolling 12 month

change in transactions compared

to the previous 12 month period

for all properties and those

priced at £1m or over.

ENGLAND & WALES All property £1m+

10%

0%

-10%

-20%

-30%

-40%

NOV

2019

DEC

2019

JAN

2020

FEB

2020

MAR

2020

APR

2020

MAY

2020

JUN

2020

JUL

2020

AUG

2020

SEP

2020

OCT

2020

Source: Dataloft, Land Registry

£237,073

£724,000

£1,092,864

£216,962

£755,817

£1,247,850

£184,395

£597,573

£965,403

£223,894

£566,085

£791,147

£365,159

£923,376

£1,351,299

£241,277

£717,839

£1,066,984

6 I PREMIUM MARKETS I NATIONAL


N A T I O N A L

M A IN S TR E AM M AR K E T

ALL PROPERTIES SOLD ACROSS

THE REGION

Rolling 12 month change in

the average price paid for all

properties sold compared to the

previous 12 month period.

ENGLAND & WALES

3%

2.5%

2%

1.5%

1%

0.5%

0%

DEC

2019

JAN

2020

FEB

2020

MAR

2020

APR

2020

MAY

2020

JUN

2020

JUL

2020

AUG

2020

SEP

2020

OCT

2020

NOV

2020

Source: Dataloft, Land Registry

BY PROPERTY TYPE OVER

THE LAST 12 MONTHS OF

ALL PROPERTY SALES

ENGLAND & WALES

Average price paid per square

foot for all property transactions.

£400

£300

£200

£322

£204

£234

£277

£245

£100

0

FLAT/APARTMENT TERRACED SEMI-DETACHED DETACHED ALL PROPERTY

Source: Dataloft, Land Registry

PREMIUM MARKETS I NATIONAL I 7


A V A I L A B I L I T Y

A N D TIM E TO SE LL

AVERAGE NUMBER OF DAYS

TO SELL

NATIONAL

Average number of days

from when a property is first

marketed on Rightmove to

when the estate agent marks it

as “sold subject to contract”.

100

75

50

62 62 64

67

71

76

67

61

83

88

73

62

53

50 49

52

25

0

AUG

2019

SEP

2019

OCT

2019

NOV

2019

DEC

2019

JAN

2020

FEB

2020

MAR

2020

APRIL MAY

2020 2020

JUN

2020

JUL

2020

AUG

2020

SEP

2020

OCT

2020

NOV

2020

Source: Rightmove

PROPERTIES AVAILABLE TO

BUY PER AGENT

Average stock per agent

calculated by the average

number of properties an agent

has on Rightmove each day

across the month.

NATIONAL

50

40

30

20

10

0

AUG

2019

SEP

2019

OCT

2019

NOV

2019

DEC

2019

JAN

2020

FEB

2020

MAR

2020

APRIL MAY

2020 2020

JUN

2020

JUL

2020

AUG

2020

SEP

2020

OCT

2020

NOV

2020

Source: Rightmove

T: +44 (0)207 079 1515

E: parklane@fineandcountry.com

fineandcountry.com

Disclaimer: This report is produced for general information only. Whilst every effort has been made to

ensure the accuracy of this publication, Dataloft Ltd accepts no liability for any loss or damage of any

nature arising from its use or from any changes made to Dataloft content by Inform users. Reproduction

of all or part of the report in any form is prohibited without written permission from Dataloft Ltd.

Report edited by Inform user and published on 05-01-2021.

Please note, HM Land Registry transaction figures are lower than usual due

to the impact of Covid-19. They are likely to be revised upward.

dataloft.co.uk

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