K E Y S T A T SE N G LA ND AN D WAL ES£743,000 £1,114,358 10.17%£612 £36.4bn 13,342LATEST DATA QUARTERLY CHANGE ANNUAL CHANGEMORTGAGE APPROVALS 98,994 11.1% 40%RESIDENTIAL TRANSACTIONS 121,640 27.2% 6.8%GROSS MORTGAGE LENDING £24.3 bn 16.6% 6.8%NEW HOME STARTS (QT) 31,900 131.5% -9.2%NEW HOME COMPLETIONS (QT) 35,260 154.6% 0.1%2 I PREMIUM MARKETS I NATIONAL
M A R K E T O V E R V I E W2 0SPRINGING 1 8 - TH E YEINTO A R THACTIONAT WASSpring Although beckons the festive and pathways season is upon to end us, lockdown there is little restrictions seasonal have cheer been and ‘good outlined will across to all’ theUK, evident the across roadmap the to political ‘normality’ arena. a Brexit sharp continues contrast to to a dominate year ago. the Consumer headlines confidence as all eyes isshowing await the shoots final outcome. of recovery Whatever and the the Chancellor’s conclusion, Budget there are provides sure to continued be implications support for forthose sterling seeking and the to economy. own their As own 2018 homedraws to a close, are we any closer to predicting whatwe can expect in 2019?A CONFIDENCE BOOSTConsumer confidence in the economy rose to an elevenmonthGLIMMERS high in February, OF SEASONAL no doubt bolstered CHEERby the impactof the swift vaccine rollout across the UK. GfK reportthat Throughout consumer 2018 views sales on volumes the economy across in the general housing and market theirpersonal have struggled, financial thanks situation to the both backdrop improved, of lower as did buyer theirwillingness demand and to low make levels major of purchases. consumer confidence. This bodes well However, forconsumer latest dataspending from theas Bankrestrictions of Englandare indicateslifted. Despite mortgagetheeconomy approvalsshrinking in Octoberby were9.9% over 4% higher2020 than(ONS), a yearthe ago,UK lookswhilethe total value of lending hit its highest monthly figure sinceset to avoid its first double dip recession since the 1970s.the surge in transactions prior to the introduction of theadditional 3% SDLT levy in March 2016. More sales tookplace across the UK in October than in any month since JulyMARKET 2017, while Rightmove ACTIVITY data CONTINUESshows properties in 2018 todate have taken an average of 61 days from the start ofAlthough marketingmany to beingexpected sold-subject-to-contract,activity in the housing onemarket daytofalter shorter during than the last start year of and 2021, an improvement with the Stamp on Duty the 65 deadlinedaystoo witnessed close to in benefit 2016. new buyers, the market continues toshow resilience. Sales volumes in January were 24.1% higherthan Despite in January the rise 2020, in the with UK an base estimated rate in the 121,640 summer, transactionscompleted mortgage interest (seasonally rates adjusted); remain low. the UK highest Finance January report totalthatsince at 2.23% 2007 the (HMRC). current Although average mortgage mortgage interest approvals rate wereis lower3.7% than the lower rate than both in five December and ten 2020, years still ago, 98,994 3.14% mortgagesand 6.11%were respectively.approved, Adjusting50% higher for inflation,than in wagesJanuary have2020. risenGrossoverlending the pastwas year,the positivehighest newsmonthly for householdfigure since finances.March 2016(Bank of England). Zoopla report buyer demand in the sixweeks SENSE to AND mid-February SENSIBILITY was up 12.4% year on year, withRightmove seeing a 45% increase in visitors to its site in theSensible pricing remains crucial to achieving a sale. Thefirst week of February and enquiries up 18%. A lack of newaverage asking price of a property fell by 1.7% in November,buyers to the market, new seller numbers were 21% lowerthe largest November fall since 2012 according toat the start of February, continues to exert pressure onRightmove, while annual house price growth has moderatedprices. throughoutThe average the year.price Annualof a houseproperty pricein growththe UK acrossis nowtheover UK in£250,000 the year to(UK SeptemberHPI, Halifax).was 3.5%, down from 4.6% ayear ago, according to the official UK House Price Index.Average prices across London remain slightly lower than ayear ago, the capital currently feeling the brunt of Brexituncertainty.BALANCING THE BOOKSThe Chancellor’s Budget offered a sober assessment of thelegacy Across of the the Covid-19 UK prime pandemic markets, and the despite average the price increase of property inborrowing is down there a fraction were on few a immediate year ago. However, significant across tax changes.manyThe assets extension, 2018 until has the not end proved of September momentous. of the In the furloughyear to thescheme end will of November support many, the the average economy price expected of gold has to fallen returnbyto its over pre-pandemic 1%, the stock level market by mid-2022, (FTSE 100) six months by 6%, while earlier the thanS&Pforecast Global in November.Luxury Index is 5.5% lower than a year ago, despitefine wines and classic cars boasting small positive returns.The Many extension commentators of the Stamp report Duty evidence Holiday of in England pent-up until demand theend of for June higher is welcomed, priced properties, as is a 0% with SDLT prospective levy on propertiesvendorsup to waiting £250,000 for more until the clarity end before of September they commit 2021. to A their newgovernment-backed purchase.mortgage guarantee scheme is set tolaunch on 1 April across the UK. The scheme will be availableto those A CRYSTAL seeking to purchase BALL up to £600,000 and will supportpurchasers who require a 95% mortgage. Unlike many schemes,Unsurprisingly all current forecasts for 2019 are issued withsupport will be available to all purchasers and not restricteda caveat relating to a deal being brokered between the UKto first-time buyers or new build homes.and the EU. The Governor of the Bank of England, MarkCarney, has reiterated his forecast that in the event of a nodealBrexit the economy may fall by over 8% and averagePRIME house MARKETSprices by up to 30%. Current forecasts from theOffice for Budget Responsibility point to employment levelsThe continuing average price to rise of a in prime 2019, property along with across average the earnings, UK has risenwhileto £1.1 inflation million, is up predicted 10% year to edge on year. back Price to the performance government’s in the2.0%prime target. market This may currently well require outpacing a gradual the general rise in market, interest withrates,growth although of 8.5% the in current the year view to December. is that the base While rate HMRC will rise reporttoincome just from 1.5 – residential 1.75% by 2021. property tax receipts fell by 27% yearon year in 2020, 10.6% more liable sales took place priced£1 million+. Across the Homes housing over market, £1 million as per account 2018, for many 2.3% of all salesrecorded commentatorsby the Land expectRegistry theto widerdate UKin 2020, marketcompared to outperformtoLondon. An average of independent forecasts predicts price1.8% in 2019. With the UK remaining a location of choice forgrowth across the UK will be 2.2% during 2019. Inbuyers from overseas, activity once travel restrictions arecomparison, those commentating on the London marketlifted is anticipated to be buoyant.anticipate 2019 may well prove another year of fallingprices. Compound growth across the UK is anticipated tobe in the region of 11% – 14% over the next five years.Forecasts for London vary widely, from less than 5% to over10%. Only time will tell which trajectory is more likely to betrue.PREMIUM MARKETS I NATIONAL I 3
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