The Zoopla rental index is based on new lets and uses repeat sales regression. Their reports are available here
DATA: Nationwide report UK house prices rose 1.7% in July
This reverses some of the prices falls they reported in recent months with the annual change now 1.5% (previously -0.1%). See the Chart of the Week for more information.
DATA: Zoopla report UK house prices rose 2.7% in June
They also reported “year to date volume of sales agreed are 20% lower than in 2019” and they expect “sales volumes for 2020 to be 15% lower than 2019, a much improved outlook than a few months ago.” See the Chart of the Week for more information.
DATA: Bank of England mortgage approvals for house purchase rise 331% in June compared to the month before
Despite the large bounce back, mortgage approvals for house purchase are still 39% below last year’s level while mortgage approvals for remortgage are 23% below.
DATA: MHCLG report the number of Energy Performance Certificates (EPCs) on new build homes fell 49% in Q2 2020
EPCs have been a good leading indicator for total new supply (completions, conversions, change of use etc) and the latest weekly data from MHCLG shows numbers have now recovered back to normal levels.
POLICY: There were newspaper reports over the weekend that MHCLG will publish their paper on reforms to the planning system this week
We will avoid commentating until we have seen the detail.
POLICY: MHCLG announce a small extension of Help-to-Buy Equity Loan
The deadline for new homes being finished under the existing scheme has been pushed out from the end of December to the end of February but the end of March deadline for legal completion remains the same. The scheme continues as planned from April 2021 with regional price caps and restrictions to first time buyers.
REPORT: Transparency International UK report on corruption risks in major planning decisions
In their research looking at a sample of 50 councils in England, they identified five key corruption risks relating to councillors’ involvement in major planning decisions: Opaque lobbying, Bribery & excessive gifts/hospitality, conflicts of interest, abuse of the revolving door, and weak oversight. They recommend increased transparency, tighter rules and strengthened oversight of councillors conduct and engagement with developers.
Chart of the Week
The divergence in house price measures has generated debate with Nationwide reporting annual prices falls, Halifax showing monthly falls but continued price rises over the year, the ONS index suspended, and the Zoopla/Rightmove indices reporting annual house price growth. With the rebound in the latest Nationwide data, it appears the lenders’ indices have been as much a reflection of their risk management during the lockdown period as a indication of what buyers are prepared to pay. House prices look set to continue rising over the summer but the economic situation suggests future price falls are highly likely.
DATA: HMRC report residential transactions increased 32% in June
Transactions are still 36% below pre-lockdown levels and it will take some time for the recent spike in sales agreed reported by Zoopla and Rightmove to complete.
DATA: MHCLG reported the number of Help-to-Buy Equity Loan completions fell 8.6% in Q1 2020 when compared to Q1 2019
While most of this fall reflects the impact of the lockdown in March, there were already signs that new build completions were levelling off. See the Chart of the Week for more info.
POLICY: MHCLG announce new laws to extend homes upwards and revitalise town centres
“The new rules, which will come into effect by September, will mean full planning applications will not be required to demolish and rebuild unused buildings as homes and commercial and retail properties can be quickly repurposed to help revive our high streets and town centres.” Homeowners will also be able to add up to 2 additional storeys to their home through a fast track approval process.
REPORT: MHCLG funded report into permitted development released
The UCL/University of Liverpool report concludes that “permitted development conversions do seem to create worse quality residential environments than planning permission conversions in relation to a number of factors widely linked to the health, wellbeing and quality of life of future occupiers. These aspects are primarily related to the internal configuration and immediate neighbouring uses of schemes, as opposed to the exterior appearance, access to services or broader neighbourhood location.”
REPORT: Law Commission publish their recommendations to transform home ownership and help leaseholders
They suggest reforms that “would make it easier and cheaper for homeowners to buy the freehold or extend their lease, and to take control of the management of their block of flats or an estate” and “would also improve commonhold to ensure it is the preferred alternative to leasehold as a way of owning home”.
REPORT: HCLG Select Committee says “a social housebuilding programme should be top of the Government’s agenda to rebuild the country”
The reports suggests “there is compelling evidence that England needs at least 90,000 net additional social rent homes a year and it is time for the Government to invest. The sector estimates that £10 billion in extra grant funding will be needed.”
Chart of the Week
The chart of the week shows the annual percentage change in the number of Help-to-Buy equity loan completions. The sharp fall in March 2020 due to lockdown is clear but what is perhaps more surprising in the performance since September 2019. Since then, the number of Help-to-Buy completions has been lower in every month when compared to the same month in 2019. It appears the housebuilding market was slowing even before COVID-19.