Category: Market Commentary

Rampant House Price Growth

Weighting and Wondering

First Time Buyer Squeeze

House prices are still rising rapidly and market activity is higher than pre-pandemic levels. But the temporary cuts to property transaction taxes have now ended or are in the process of being tapered off. This should bring greater clarity on the drivers of the current housing boom but it appears the higher than normal levels of market activity and rampant house price growth could continue past their end. However, there are some issues with the house price growth rates currently being reported that could mean price growth is lower than they suggest. Meanwhile, new data provides further detail on the squeeze that has been facing first time buyers since the pandemic started.

Continue reading “Market Commentary – June 2021”

Fear Of Missing Out

Continue Cycle or Start New

Last month’s market commentary looked at whether the housing market is in a bubble, short-term boom, or a new normal. We concluded that it was too early to know but there are some rational explanations for what is happening to the housing market here and in other countries. Since then, the market has continued to boom with high levels of sales agreed, low levels of homes being listed on the market, and rising house prices. But, as the boom continues, there is one factor that could increasingly lead to irrational decisions: the fear of missing out.

Continue reading “Market Commentary – May 2021”

Housing Bubble or New Normal

Not So Special

A Tax Cut For All

With house prices booming and transactions double their normal level, there are growing concerns that the housing market is in a bubble. It is also clear that there have been profound changes in the market since the pandemic hit, with many people reassessing what they want and need from housing. So, is this a house price bubble or are we seeing the start of a new normal created by the pandemic?

Continue reading “Market Commentary – April 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”

Budget Pre-Announcements

Housing Market Support

The Crash That Never Happened

The two major housing announcements in the 2021 Budget were not a surprise given the earlier leaks but the most important message from the Chancellor on housing remained unstated but clear. This was a budget to support the housing market and avoid the previously widely predicted housing market crash.

Continue reading “Market Commentary – 2021 Budget”

End Or Extend

Non-UK Born Residents & Housing Demand

London Demographics

The end of the stamp duty holiday is rapidly approaching and there are widespread calls for an extension but the Chancellor is holding firm so far. An extension could help some buyers but risks creating further pressure on the housing market and will just delay any cliff-edge. Meanwhile, city centre rental markets are at risk from greatly reduced tenant demand due to fewer non-UK born residents with London looking worse affected.

Continue reading “Market Commentary – January 2021”

The Boris Bounce & Lockdown

The Crash That Never Happened & Housing Inequality

Stamp Duty Holiday & The Race For Space

What Happens Next

The housing market ended 2020 as it had started, with a boom in activity and prices. However, the rest of the year was rather more volatile thanks to the pandemic, but the much predicted bust never appeared. As we approach the end of the stamp duty holiday in March, there is considerable uncertainty about what happens later in the year. This note provides a brief review of the housing market in 2020 and looks ahead to what could happen next.

Continue reading “Market Commentary – 2020 Review”

Open For Business During Lockdown

Looking Ahead

New Housing Supply

The housing market stayed open for business during this second lockdown and the housing boom has continued. Activity levels and house prices look set to continue rising through to March next year but, as the end of the year approaches, analysts and commentators have turned their attention to forecasts. The range of forecasted outcomes reflects the massive uncertainties facing the economy and the housing market, and most are possible. Meanwhile, the latest net housing supply data from MHCLG tells us what was happening last year but little about the challenges that the housebuilding market is now facing.

Continue reading “Market Commentary – November 2020”

Summer Boom Leading To A Winter Rush

The Pandemic’s Second Wave

Tax Booms and Cliff Edges

The housing market boom is continuing into the autumn with sales agreed still well above last year’s levels and house prices rising. However, we’re yet to see the boom in sales agreed reach completion and there are growing concerns that many may not complete before the stamp duty holiday ends in March. Meanwhile, the second wave of the pandemic continues to grow and brings with it further disruption, challenge, and loss. This month’s commentary also looks back at previous tax booms and cliff edges as a guide to what might happen next year.

Continue reading “Market Commentary – October 2020”

What Happens Next?

The Politics of Planning

First Time Buyers Crunched

The housing market is booming, but how long can it last and will there be a crash? Last month we looked at what was driving the current housing boom. Now everyone is asking what happens next. The truth is no one knows given the widespread uncertainties. But you don’t need to be a superforecaster to identify some of the important events coming up in the next six months and assess what they could mean for the housing market. This note looks at these and also at growing political challenges facing housing – namely planning and home-ownership.

Continue reading “Market Commentary – September 2020”