Weekly Summary: 9th April 2021

DATA: Halifax reported slightly faster house price rises in March

They reported an annual change of 6.5%, higher than the 5.2% reported in February.

DATA: Nationwide reported slightly slower house price rises in March

They reported an annual change of 5.7%, lower than the 6.9% reported in February.

DATA: Bank of England reported a 10% fall in mortgage approvals in Feb

Despite the 10% monthly fall in number of mortgage approvals for house purchase, there were still 20% more approvals for house purchase than the same month in 2020. Approvals for remortgaging are still 34% lower than last year.

DATA: Bank of England reported a fall in mortgage rates in March

Quoted rates across all loan-to-value ratios fell in March with the exception of those at 95% LTV which, at 4.14%, remain near their pandemic high.

DATA: HMRC reported 2019-20 Annual Tax on Enveloped Dwellings stats

ATED is an “annually recurring tax on UK residential dwellings which are held in a ‘corporate envelope’ (e.g. a company)”. They reported total ATED receipts were £128m, down 8%.

DATA: MHCLG reported on Energy Performance Certificates in Q4 2020

The data is a useful leading indicator for new housing supply and reported 216,577 EPCs on new build dwellings in 2020. The data has been delayed in recent quarters as MHCLG have taken control of the database. A further update is expected at the end of April.

DATA: RICS residential market survey reported rise in sales market activity

The survey reported “Buyer enquiries and agreed sales gain significant impetus following stamp duty holiday extension” and “House prices continue to move higher across the UK”.

POLICY: Government announces “package of measures to revitalise England’s cherished high streets and town centres”

They include a new planning law that “enables unused commercial buildings to be changed into homes” and introduces “a new fast track for extending public service buildings”.

POLICY: Government response to First Homes proposals and Small Sites exception for affordable housing

Alongside the government’s response to the consultation of First Homes was the news that the they will not be extending the affordable housing exemption to larger sites (40-50 homes). This is not surprising given the robust recovery of the housing market.

POLICY: National welcome for Hong Kong arrivals

MHCLG have set out a package of support for British National (Overseas) families moving to the UK from Hong Kong. The release notes that “As of 19 March 2021, approximately 27,000 BN(O) status holders and their family members have applied for a visa since January” with around 123,000 to 153,000 expected in the first year.

REPORT: Lichfields on On/Off Site Affordable Housing Delivery

The report investigates off-site affordable housing provisions in Local Plans and the advantages/disadvantages of off-site delivery.

REPORT: LSE on “The Pandemic and the housing market: a British story”

The report makes use of HM Land Registry data to look at the impact of the pandemic on the housing market. Unfortunately, it appears the researchers are not aware that the longer lag in sales being registered during the pandemic makes it difficult to do meaningful analysis using this data and it appears they have failed to factor this into their findings.

Chart of the Week

This week’s chart looks at the distribution of prices for homes sold during 2020. As noted above, this data is still not complete but offers a reasonable sample when considered across the whole year. It highlights how much more expensive London house prices are when compared to even to the South East, the next most expensive region. For example, around 1/3rd of sales in London were under £400,000 while this covered nearly 2/3rds in the South East. Meanwhile, 95% of sales in the North East were for £400,000 or less.

Market Commentary – March 2021

High Transactions, Low Turnover

Stuck In Our Homes

The stamp duty holiday may have been extended but the number of transactions is still high thanks to its late announcement and the continued race for space. However, despite the current high levels of transactions, the proportion of housing stock that transacts each year is still very low and this creates a number of problems including higher volatility. This note also looks at the demographic factors that are contributing to low turnover.

Continue reading “Market Commentary – March 2021”

Weekly Summary: 26th March 2021

DATA: ONS reported 7.5% annual rise in UK house price in January

The annual growth rate was slightly lower than the 8.0% reported last month but has not fallen significantly, as seen in the indices based on earlier points in the purchase process.

DATA: Zoopla reported 4.1% annual rise in UK house prices in February

The Zoopla index tends to track the ONS index but there has been a divergence in recent months. It will be interesting to see if there are any revisions in coming months.

DATA: HMRC reported 147,000 residential transactions in February

The 23% monthly rise increased transactions to their highest level since March 2016 (when the 3% additional SDLT rate was introduced). This reflects the rush to beat the March SDLT deadline before it was extended. It will be interesting to see what happened in March given the late extension and it’s also important to note that these figures are subject to revision.

DATA: ONS reported labour market statistics

The data showed small increases in payrolled employees in February and small rise in the unemployment rate to 5.0%. The release also included data and analysis of HMRC PAYE data on payrolled employees by nationality.

DATA: ONS released house price statistics for small areas

The release contains a wealth of house price data including prices by property type, median, lower quartile down to lower super output area geographies.

DATA: ONS released housing affordability in England & Wales: 2020

This release contains data on house price to earnings ratios by local authority.

REPORT: DWP released Family Resources Survey 2019-20

The survey provides “information on income and circumstances of UK households” including housing tenure and housing expenditure.

REPORT: House of Commons Environmental Audit Committee report on the Energy Efficiency of Existing Homes

The report highlights the need to improve the energy efficiency of the UK’s housing stock and the failure of Government schemes to adequately address this issue.

Chart of the Week

This week has seen a lot of attention on the very high number of transactions in February as reported by HMRC. This is a temporary issue as buyers rushed to beat what they thought was a March SDLT holiday deadline. Instead, the bigger issue in recent years has been very low levels of housing stock turnover. This problem is highlighted by data from the Family Resources Survey which shows that just 4% of owner occupiers have moved home per annum over the last few years while over 60% last moved home more than ten years ago. These rates as much lower than seen in the 1980s and 1990s, and have important consequences for the future of the housing market.