Property Market Pulse

By Stuart Boughey

The property industry is riding high as it shakes off the January blues, rubs its eyes following the hibernation caused by years of uncertainty and springs back into record-breaking life…

February is finally here and as we enter the Brexit transition period,  the general feeling, believe it or not - is one of relief, excitement and optimism.  It seems the message is loud and clear: It’s busy out there! 

It’s still so early in the year and we have yet to see the true impact of the Election and Brexit on the number of completions, mortgage approvals and prices etcetera, but if the current buzz surrounding the market is any indicator then we are definitely in for a deluge of forward movement and upward mobility across the board. 

While we cannot say for other parts of the country, one agent in our area informs us they are so overwhelmed with offers, they are having to increase their staff numbers!

Regardless of where you are in the market;  whether you are selling, buying or an industry professional, commentator or economist - now is the time to take advantage of favourable conditions.  

Some may say “the shackles are off” and to some extent that may well be true, others may treat the news with skepticism and continue to hold off. 

Whatever happens next : we are all in it together and to keep a calm, level headed approach is key. Opportunity is out there.  With this in mind, let’s have a look at the latest data, news and developments. 

THE PROPERTY MARKET IN 60 SECONDS

 

December  2019 UK Average House Price Index (Nationwide, Seasonally Adjusted):  £215,282 

January 2020 UK Average House Price Index (Nationwide, Seasonally Adjusted):  £215,897

December 2019 UK Average House Price Index (Halifax, Non-Seasonally Adjusted): £238,963

January 2020 UK Average House Price Index (Halifax, Non-Seasonally Adjusted): £240,054

UK National average (all property types) asking price (Rightmove, January 2020) :£306,810

Number of Mortgage approvals ( Bank of England data) *  : 67,200

Number of sales registered at HMRC**: 102,050

 

London & South East

Strongest Market in London***:  Hounslow

Weakest Market in London***:  Camden 

Listing to Finding a Buyer in London: 78 days 

South East Average Asking Price:  £400,150 

 

*  Based on December 2019 Figures

**Based on most recently available figures (November 2019) 

***Based on Annual Asking Price Changes, Rightmove January 2020 (Three Monthly Rolling Average)

Headlines

  • The Housing Minister reveals his hand to “make the planning process clearer, more accessible and more certain for all users, including homeowners and small businesses” 

Property Week

  • A jump in interest for Help to Buy/Shared Ownership as majority election result and rumours of extending the help to buy scheme take hold with one website reporting a “62.4% surge in shared ownership enquiries” in January.

The Negotiator

Which oddly foreshadowed...

  • MCHLG officially launches the “First Homes” scheme aimed at ‘cutting the cost  of a proportion of new homes by a third for first-time buyers’. The government continues to consult on how to achieve this. 

Ministry for Communities Housing and Local Government (MCHLG)

  • The RICS works alongside The U.N, The World Bank and 70+ organisations to deliver a Global Standard on Fire Safety. 

RICS & The U.N. on Fire Safety Global Standards

  • The RICS responds to the “Regulation of Property Agency '' report launch urging the government to put the necessary importance on its findings.  

RICS & RoPA
 

STATISTICS & COMMENTARY 

Nationwide (December 2019) & Nationwide (January 2020)

Commenting on the Market in December 2019;

  • Annual House price growth in 2019 ended at +1.4% from the December 2018

  • Little changed over the month with just a minor increase of +0.1%

  • Average Price (Non-Seasonally Adjusted) -   £215,282

 

Robert Gardner, Nationwide's Chief Economist

Annual UK house price growth edged up as 2019 drew to a close, with prices 1.4% higher than December 2018, the first time it has been above 1% for 12 months.”

 

January 2020 pointed towards positive growth too;

  • Annual House Price Growth in January 2020 saw a +1.9% from January 2019.

  • A uptick on the month December-January  of +0.5%

  • Average Price: (Non-Seasonally Adjusted) -  £215,897

  • Data from MCHLG (English Housing Survey) showed a slight uptick in the home ownership rate in 2019 to 63.8% (from 63.5% in 2018)

 

Robert Gardner, Nationwide’s Chief Economist

January saw a further modest pick-up in annual UK house price growth to 1.9%, from 1.4% in December. This follows twelve 12 successive months in which annual price growth had been below 1%”

“Recent data continue to paint a mixed picture. Economic growth appeared to grind to a halt as 2019 drew to a close, though business surveys point to a pickup at the start of the New Year.

(The) Labour market data was surprisingly upbeat in the three months to November, with the economy adding over 200,000 jobs - the largest gain since the end of 2018. Economic developments on both the domestic and global scale will continue to be the key driver behind development of the housing market, alongside  how quickly the uncertainty of the UK’s trading relationships will gain clarity. Modest growth is expected over the next 12 months. ‘Comments have been edited for length and/or clarity”

 

Halifax

Average Price (Non-Seasonally Adjusted):  January: £240,054

Monthly Change:  +0.4%

Quarterly Change (November-January) : +2.3%

Annual Change: +4.1%

Seasonally Adjusted unless otherwise stated
 

Russell Galley; Managing Director, Halifax

House prices kicked off the year with a modest monthly increase, rising by 0.4% in January following the stronger gains of 1.8% and 1.2% seen in December and November respectively. As a result, annual growth remained relatively stable at 4.1%, up just a fraction from the end of 2019.  

Key Market indicators continue to show signs of improvement, among them buyer and seller activity and a reduction in uncertainty in the economy, however it’s too early to tell if if a corner has been turned or if the recent positive  figures may actually represent activity that would ordinarily have been expected to take place last year, but was delayed by economic uncertainty. We still expect a moderate rate of house price growth over the course of the year.”

Source: Halifax - January 2020

RICS Residential Market Survey (December 2019)
 
  • Sales expectations improve noticeably both in the near term and twelve months ahead

  • Enquiries rise while sales and instructions also increase (albeit more modestly) over the month

  •  House price inflation anticipated to accelerate going forward

  • Buyer demand, the headline new buyer enquiries indicator posted a balance of +17%, up from -5% in November. 

  • The majority of UK regions saw an increase in enquiries over the month, with respondents in Wales and the North East in particular reporting solid growth.

  • Buyer enquiries in London and the South East picked up following data being in negative territory in November 2019.

  • Agreed sales edged up at the national level, with the headline indicator registering a net balance of +9%, up from -6% in November : the first occasion since May 2019 in which the series returned a positive reading. 

  • London & East Anglia reported the strongest improvements at +22% and +23% respectively.

  • Northern Ireland & Scotland reported weakened agreed sales figures against house prices rising at a firm pace. 

  • New instructions being listed on the market also picked-up slightly at the national level, as a net balance of +9% of contributors reported an increase although this was more weighted to London & the South East. 

  • With regards to house prices, the survey’s headline net balance came in at -2% (compared to -11% previously), signalling a broadly flat national trend for the time being.

 

Lettings: 

  • In the lettings market, tenant demand (non-seasonally adjusted monthly series) picked-up modestly over the survey period.

  • Landlord instructions remained in negative territory. 

  • Rents are expected to rise as a result of falling supply and rising demand, at around 2% over the course of the year and closer to 3% over the next five years. 

  • Five year price expectations, at 3.5% per annum, have moved slightly above those for rents for the first time since 2018 (although the RICS  would caution against placing too much emphasis on a single month’s figures).

HMRC
  • November saw 102,050 home sales, which represents a slight decrease from October 2019 of -1.57%

  • UK house prices increased by 2.2% in the year to November 2019, up from 1.3% in October 2019

  • Between November 2018 and November  2019, the volume of Transactions increased by 1.9%

The Bank of England
  • December saw 67,200 mortgage approvals, a marked increase of 3.38% from November.

  • Net mortgage borrowing increased to £4.6 billion in December

  • The annual growth rate held at broadly the same level 3.4%

  • Approvals for remortgage rose slightly on the month to 49,700

 

A LOOK AT LONDON

Source: Rightmove January 2020 (Asking Prices)

Fast Facts January 2020

  • The average price of property coming to the Market in London in  January 2020 surges 2.1% which is the largest spike Rightmove has ever recorded at this time of year. 

  • The average price for a property in Greater London now lies at £612,465 compared with £600,145 in December

  • Buyers are also optimistic, with a 19% increase in the number of sales agreed compared to the same period a year ago.

  • Listing to Finding a Buyer increased slightly to 78 days in January as opposed to 73 days in December

 

Miles Shipside, Rightmove director and housing market analyst;

“We have been seeing signs of recovery in the London market since the middle of last year, and these statistics seem to indicate a further boost, with many buyers and sellers feeling that the

the election result gives a window of stability.  There now seems to be a release of pent-up demand, which potentially indicates an active spring market with more  properties being listed by new sellers than we have seen in recent years.

The early bird buyers are on it and some have snapped up a property already, with the number of sales agreed up by 19% on this time last year.”

 

BY AREA

 

Avg MP

Monthly

Annual 

Greater London

£612,465

+2.1%

+3.1%

Inner London

£756,662

+2.5%

4.6%

Outer London

£508,052

+1.4%

1.7%

South East

£400,150

+1.7%

2.6%

BY MARKET SECTOR

 

Avg MP

Monthly

Annual 

First-Time Buyers

£481,542

+0.2

+2.1%

Second - Steppers

£691,387

+2.2%

+3.0%

Top of the Ladder

£1,418,181

+4.5%

+7.1%

NATIONAL AVERAGE FOR COMPARISON

 

Avg MP

Monthly

Annual 

National Average

£306,810

+2.3%

+2.7%

First-time Buyers

£193,103

+1.6%

1.6%

Second-steppers

£275,947

+1.7%

+1.9%

Top of the Ladder

£538,221

+3.1%

+3.9%
 

 

HOW INDIVIDUAL BOROUGHS HAVE PERFORMED;

(Organised by top annual growth to least annual growth)

 

Borough
Avg. price JANUARY 2020
Monthly Change (%)
Annual Change

Hounslow

£531,759

1.6

4.0%

Tower Hamlets

£598,751

1.3

3.8%

Barnet

£622,784

-2.5

2.9%

Islington

£754,755

0.1

2.7%

Lambeth

£628,249

0.0

2.7%

Sutton

£460,274

-0.2

2.3%

Newham

£414,064

0.7

1.3%

Southwark

£632,388

-2.5

1.2%

Waltham Forest

£480,643

0.3

1.2%

Barking & Dagenham

£312,010

-1.1

0.7%

Harrow

£548,571

0.5

0.6%

Hackney

£622,648

0

0.4%

Lewisham

£458,302

0.1

0.4%

Havering

£405,981

-0.2

0.3%

Croydon

£423,341

-0.9

0.2%

Bromley

£533,716

-0.1

0.1%

Westminster

£1,447,028

1.8

0.1%

Redbridge

£448,553

-0.7

0.0%

Hammersmith & Fulham

£910,063

-0.5

0.0%

Bexley

£402,823

-1.7

-0.1%

Greenwich

£431,318

-0.5

-0.2%

Kingston Upon Thames

£595,469

1.8

-0.2%

Wandsworth

£757,972

0.0

-0.5%

Brent

£557,527

0.9

-0.8%

Ealing

£540,036

-1

-0.8%

Haringey

£576,675

-1.9

-1.5%

Hillingdon

£479,485

-0.1

-1.8%

Enfield

£443,516

0.1

-2.1%

Merton

£600,482

-3.5

-2.5%

Kensington & Chelsea

£1,502,349

-3.7

-4.3%

Richmond Upon Thames

£788,004

-2.4

-4.5%

Camden

£968,276

-1.6

-4.7%

 

NEWS & HEADLINES:

  • Cladding in buildings is once again catching headlines as the BBC investigates the plight of several thousand leaseholders who live in buildings with potential cladding issues and the lag of testing by freeholders. 

Source: BBC News

  • The Housing Minister reveals his hand to “make the planning process clearer, more accessible and more certain for all users, including homeowners and small businesses” ahead of the new white paper and hints at plans to address resourcing and performance in planning departments by increased applications fees, ensuring more land is available for development and at extending permitted development rights to the demolition of existing commercial buildings for residential development.

Source : Property Week (Requires Registration)

  • A jump in interest for Help to Buy/Shared Ownership as majority election result and rumours of extending the help to buy scheme take hold with one website reporting a “62.4% surge in shared ownership enquiries” in January.

The Negotiator

  • MCHLG officially launches the “First Homes” scheme aimed at ‘cutting the cost  of a proportion of new homes by a third for first-time buyers’. The government continues to consult on how to achieve this, but it is postulated that increased Section 106 Agreements may be levied. 

Source: Ministry for Communities Housing and Local Government (MCHLG)

  • The RICS works alongside The U.N, The World Bank and 70+ organisations to deliver a Global Standard on Fire Safety

Source:  RICS & The U.N. on Fire Safety Global Standards

  • The RICS responds to the “Regulation of Property Agency '' report launch urging the government to put the necessary importance on its findings.  

Source: RICS & RoPA
 

GUIDANCE UPDATES

Reminder: the RICS professional standards and guidance, global RICS Valuation – Global Standards (The Red Book Global)  is now in effect. 

Download a copy here.

If you are interested in ordering  a Compliance Pack, including a summary of the changes and a suite of template reports and engagement documents, please email me: stuart@arnoldandbaldwin.co.uk 

 

Code for Leasing Business Premises, 1st Edition 

If you own, lease or manage commercial property, the RICS has released brand new mandatory guidance for guidance effective from the 1st September 2020. You can download a copy here: RICS –  Code for Leasing Business Premises, 1st Edition, February 2020

 

That’s all for this month. Exciting times are ahead. 

Thank you for reading and we shall see you in March.
 

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About the author

Stuart Boughey  avatar

Stuart Boughey

Being the forensic detailed driven Surveyor that he is, Stuart's analysis and interpretation of all things property market related make him the best person within the Arnold & Baldwin family to bring you all of the latest news and commentary. Having trained in London, his knowledge of the area is fantastic. If you would like to make suggestions on any improvements, or additional information for Stuart to focus on, his phone is always on!

Read more about Stuart Boughey

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