Weekly Summary: 30th September 2022

DATA: Rightmove reported asking prices rose 8.7% in year to September

They report the monthly increase (0.7%) was in line with the usual September increase (their data is not seasonally adjusted). They also noted “Buyer demand is up 20% on the pre-pandemic five-year average” while “The number of homes coming to market has risen back to 2019 levels”.

DATA: Nationwide reported house prices rose 9.5% in year to September

They report “annual house price growth slowed to single digits for the first time since October last year”.

DATA: Zoopla reported annual house price rise of 8.2% in August

They report(PDF) “The Housing market is transitioning to a buyers’ market as higher mortgage rates are set to cut buying power by up to 28%”. They also report “New sales are holding up with no sudden drop in demand in recent weeks – but buyer interest is weaker than a year ago” while “Asking price reductions are at the highest levels since before the pandemic as sellers adjust to more price-sensitive demand”.

DATA: BoE reported a sharp rise in house purchase mortgage approvals

The data for August was 16.6% higher than the previous month and 12% higher than the 2014-19 average. This may reflect buyers rushing to transact as mortgage rates rise.

DATA: BoE reported another rise in effective mortgage rates in August

The average rate on new mortgage advances was 2.56%, higher than last month’s figure of 2.33% and the average on outstanding balances (2.18%).

DATA: DLUHC published planning applications in England data for Q2 2022

The release shows a 17% annual fall in applications for planning permission and a 16% annual fall in the number of homes granted planning permission.

REPORT: Resolution Foundation on “Blowing the budget”

Their report shows that “today’s Government is no longer fiscally conservative or courting the Red Wall” while “the focus has shifted to the South of England where the beneficiaries of these tax cuts are more likely to be living”.

REPORT: LGA/Housing LIN report on “Housing our ageing population”

The report “makes a number of recommendations to government on how we can best meet the needs of people in later life”.

REPORT(£): Research on “Age segregation and housing unaffordability”

Their results “provide evidence of a strong association between increasing housing unaffordability (for sales and rentals) and increasing residential age segregation (beyond other local characteristics) in urban areas”. This Twitter thread provides further detail.

REPORT: Savills report on the Single Family Rental market

The “SFR” market could be one of the big beneficiaries of any housing market downturn.

NEWS: MoneyFacts on mortgage products withdrawn this week

Their last update (11:31am yesterday) put the total number of residential mortgage products available at 2,340. Last Friday morning the figure was 3,961.

Chart of the Week

Yesterday we published some estimates for which regions and countries of the UK would be worst affected by negative equity in the event of price falls. One of the key drivers is recent patterns in price growth. To illustrate this we have used the ONS house price index but shown the percentage change since June 2022 below – unlike most charts the x-axis is in reverse date order. It shows that most regions would be similarly affected by 10% price falls given recent high price growth but London was the region that would be worst affected by 20% price falls. This is shown by the London line taking much longer to fall below the -20% line – in August 2015. Meanwhile a 20% fall only takes the UK line back to around 2018/2019. However, the North East is the worst affected region if prices fall by 30%.

Weekly Summary: 23rd September 2022

DATA: BoE increased Bank Rate by 0.5 percentage points to 2.25%

DATA: HMRC reported 105,000 residential transactions in August

The seasonally adjusted figures were 1.1% higher than the previous month and 6% higher than their pre-pandemic average.

DATA: ONS reported record high stamp duty land tax receipts in August

See Chart of the Week for more detail.

DATA: DLUHC published statutory homelessness figures for 2021-22

They report in England “278,110 households were assessed as either being threatened with homelessness or already homeless in 2021-22, up 2.8% from the previous year but 4.0% below the pre-COVID level in 2019-20”.

DATA: BoE published agents’ summary of business conditions – Q2 2022

They reported “Demand for housing remained strong, but supply has started to increase in the owner-occupier market”.

DATA: PublicHouse updated their compilation of international housing data

It pulls together “publicly available data on the number of dwellings and people in cities and countries around the world” and has some updated data and analysis.

DATA: VOA called for help with private rental data

They “depend on the goodwill and trust of landlords, letting agents and tenants who provide details of rent levels being paid in the private rented sector” and are calling for more landlords and other organisations to provide data.

POLICY: HM Treasury published “The Growth Plan”

The government will launch Investment Zones with lower taxes – including “full stamp duty land tax relief on land bought for commercial or residential development” – and “planning liberalisation” (fact sheet). They are proposing to accelerate housing delivery through planning reform with a paper due later this year. They also doubled the nil-rate SDLT band to £250,000 and increased the level first-time buyers start paying stamp duty to £425,000. First time buyer relief was increased to £625,000. They forecast “Doubling the nil-rate band will enable up to 29,000 more people to move home each year” (fact sheet).

POLICY: DLUHC launched £2bn Rough Sleeping Strategy

REPORT(PDF): FCA reported on insurance for multi-occupancy buildings

They report the “Supply of insurance for mid-rise and high-rise multi-occupancy residential buildings has contracted significantly” while “Premium rates have doubled between 2016 and 2021”. There are also concerns about high commissions and sharing of those with freeholders and managing agents. The Secretary of State’s response is available here.

REPORT: Resolution Foundation published Q3 2022 Housing Outlook

The report highlights the rapid rise in private rents and high housing costs relative to other tenures. It also shows “The amount of space that private renters get for their money has fallen since the turn of the century”.

REPORT: HM Treasury published independent forecasts – September

Chart of the Week

Just this week ONS reported another record high for Stamp Duty Land Tax (SDLT) receipts over a 12 month period. But, in the years leading up to the pandemic, the receipts generated by the tax were far less important that its use as a political tool. And it proved very successful. It was first used to dampen the top-end of the housing market and stop the constant front page headlines about rapidly rising prices in Kensington & Chelsea. It was then used (via 3% HRAD) to shift buying power towards first time buyers and away from investors/second home buyers. This helped increase first time buyer numbers in all but the most expensive markets (e.g. London) where affordability was already too stretched for them. Today’s announcement extends the SDLT support to first time buyers in more expensive markets (e.g. London) but does little to help the other challenges facing the market and will be disappointing to agents at the top-end of the market given expectations.

Two Week Summary: 16th September 2022

DATA: ONS reported UK house prices rose 15.5% in the year to July

This was much higher than last month’s revised figure of 7.8% though this reflects the volatility in last year’s index due to the SDLT holiday. The ONS index is also based on completed sales so will be reflecting buying conditions several months previous.

DATA: Halifax reported house prices rose 11.5% in the year to August

This marked another record high for the index at £294,260.

DATA: ONS reported monthly GDP rose 0.2% in July

GDP was 2.3% higher than last year and 0.7% higher than January 2020.

DATA: BoE reported another sharp rise in quoted mortgage rates in August

Average quoted two year fixed rate mortgages at 75% loan-to-value were 3 times higher than one year ago (3.64% vs. 1.23%).

DATA: FCA & BoE published MLAR statistics for Q2 2022

The release includes a wide range of statistics on the mortgage market, some of which are summarised in our Digging Deeper slide deck.

DATA: DLUHC published Building Control data on housebuilding activity

The data, which undercounts actual housebuilding numbers, showed a sharp rise in starts. It is not clear whether this represents an actual change in the market or a change in NHBC’s market share in some local markets.

DATA: DLUHC published Green Belt statistics for 2021-22

See Chart of the Week for more detail.

DATA: DLUHC launched a national map of planning data for England

POLICY: Simon Clarke appointed Secretary of State for Levelling Up, Housing and Communities

POLICY: Scottish Government announced rent freeze for tenants

They will introduce emergency legislation to “put in place a rent freeze until at least 31 March 2023 and a moratorium on evictions, as well as a new tenants’ rights campaign”.

REPORT: RICS published August Residential Market Survey

They report “Buyer enquiries and sales continue to fall but prices remain underpinned at this stage”. The report is still not available online at the time of publication.

REPORT: UK Finance published Household Finance Review 2022 Q2

They estimate the “wriggle room” (% of net income left after mortgage payments, basic household expenditure & credit commitments) for those on fixed rates ending in 2022 will fall from just over 35% at origination to 25% once mortgage rate increases and the rising cost of living are factored in.

REPORT: BoE published Inflation Attitudes Survey – August 2022

REPORT: Zoopla/Hometrack published Rental Market Report Q3 2022

They report “Rental growth is close to peaking at 12.3% per annum” while “London’s rental growth, at 17.8%, is unsustainable and reflects a rebound in rents after a double-digit decline over the pandemic”. They also report the stock of homes available to rent was 46% below the 5 year average while “rental demand” was 142% higher than the average.

REPORT: Homes for Scotland published report on housebuilding

The report by Lichfields investigates the “social and economic benefits of home building in Scotland”.

REPORT: IPPR published a report on improving the PRS in Manchester

The report sets out how they “have sought to develop a financial model for improving private property in Greater Manchester” – specifically the private rented sector (PRS).

NEWS: Moneyfacts reported a fall in mortgage product availability

They report “The number of available mortgage products in the residential sector fell by 517 over the month to leave just under 3,900 on offer for September”. This figure is “1,425 fewer than were available at the start of December”.

Chart of the Week

Today DLUHC published data on Green Belt land coverage across England. It shows the total land area was estimated at 1,638,150 hectares on the 31st March 2022. This is approximately 12.6% of England’s land area and an increase of 1.5% (24,150 hectares) during the 2021/22 financial year. However, as the regional chart below shows, this was largely due to the increase in Green Belt designated land in the North East of England (specifically Northumberland). Excluding the North East from the national figures shows it shrank by 2,650 hectares (-0.2%). The release contains more details on the reasons for the big increase in Northumberland’s Green Belt (search for “Northumberland Local Plan”).

Four Week Summary: 2nd September 2022

DATA: Nationwide reported house prices rose 10% in the year to August

This was the thirteenth successive monthly increase.

DATA: Rightmove reported asking prices rose 8.2% in the year to August

They reported a 1.3% monthly fall in asking prices but their index is not seasonally adjusted – prices usually fall in August. They also reported “Buyer enquiries to agents are down 4% on the hot market of 2021, but remain 20% higher than 2019”.

DATA: Zoopla reported house prices rose 8.3% in the year to July

Their data shows buyer enquiries are still higher than pre-pandemic but have fallen from last year’s levels. The number of sales agreed in July/August was 13% higher than pre-pandemic while the stock of homes for sale was 27% lower.

DATA: ONS reported house prices rose 7.8% in the year to June

The ONS index is reporting volatile annual changes at the moment given the impact of the stamp duty holiday on their index last year.

DATA: HMRC reported 104,500 residential transactions in July

The seasonally-adjusted data was 5% higher than the pre-pandemic average and last month’s fall got revised away – it was a data collection issue as we suggested at the time.

DATA: ONS reported £1.6 billion in SDLT receipts during July

The figure, covering both residential and commercial property, was 14% higher than the same month last year and took the annual total to another record high of nearly £16.9 bn.

DATA: BoE reported a fall in mortgage approvals for house purchase

The data for July was 14% lower than the same month last year and 4% below the pre-pandemic average.

DATA: BoE reported another rise in effective mortgage rates

The actual rate on new mortgage advances was 2.34% in July, higher than last month’s figure of 2.16% and last year’s figure of 1.84%. This rate will probably rise quickly in coming months given what has happened to quoted mortgage rates.

DATA: ONS reported monthly GDP fell 0.6% in June

This left GDP just 0.5% higher than the pre-pandemic peak in January 2020.

DATA: UK Finance reported falls in mortgage arrears in Q2 2022

The number of borrowers with arrears of over 2.5% of their balance was 10% lower in Q2 2022 than the same quarter in 2021.

DATA: MoJ reported mortgage and landlord possessions data for Q2 2022

Claims issues, orders, and possessions by county court bailiffs all rose sharply though from very low numbers last year.

DATA: DLUHC reported falls in Help to Buy equity loan completions

Q1 2022 data shows a 65% fall in the number of completions compared to Q1 2021.

DATA: HMT published mortgage guarantee scheme statistics

“There were 17,996 mortgage completions from scheme launch on 19 April to the end of March 2022, which represents 6.5% of all residential mortgage completions in the UK from the beginning of April to the end of March 2022”.

POLICY: DLUHC launched social housing rents consultation

The consultation “focuses on the introduction of a rent ceiling from 1 April 2023 to 31 March 2024, which would act as an upper limit on the maximum amount by which Registered Providers of social housing can increase rents in that year”.

POLICY: DLUHC launched consultation on Decent Homes Standard for the private rented sector

The consultation “seeks views on the introduction and enforcement of a Decent Homes Standard in the private rented sector in England”.

REPORT: DLUHC reported on the Public Land for Housing programme

This is the concluding report for the programme but perhaps the most interesting part is the hidden sheet in the data download that contains data on the purchaser and price paid for the sites that have been sold.

REPORT(PDF): RICS published July residential market survey

They report “New buyer demand edges down again but limited supply continues to underpin market pricing”.

REPORT: NHBC published their new homes report for Q2 2022

Their data, which undercounts delivery showed “40,289 new homes completed in Q2 2022, 16% up on Q2 2021” while new home registrations were 45% higher over the same period.

REPORT: Resolution Foundation published Living Standards Outlook

They warn that while there’s lots of uncertainty over energy prices, inflation “could leave average real pay in Q2 2023 9 per cent lower than two years earlier, and wipe out all pay growth since 2003”. Another recent report highlighted how energy costs vary depending on the energy efficiency of housing.

REPORT: Crisis/Zoopla published report on the cost of renting

The report investigates the cost of renting and the shortfall in housing benefit.

REPORT: Policy Exchange reported on helping first time buyers

It recommends “removing unnecessary rules and regulations that may inhibit the ability of borrowers to access finance”.

REPORT: Ryan-Collins et al on housebuilding and climate change

They warn that “Using embodied and operational emissions models we estimate the government’s business-as-usual housing strategy consumes England’s whole cumulative carbon budget [1.5°C] by 2050”.

Weekly Summary: 5th August 2022

DATA: Nationwide reported UK house prices rose 11.0% in year to July

They reported house prices rose 0.1% in the month with the annual rate of change increasing from 10.7% the previous month.

DATA: Halifax reported UK house prices rose 11.8% in year to July

They reported house prices fell 0.1% in the month with the annual rate of change decreasing from 12.5% the previous month.

DATA: Zoopla reported annual UK house price rise of 8.3% in June

Their data shows the number of sales agreed in July was 17% higher than the five year average. They warn “The scale of the slowdown will depend upon how high mortgage rates rise” and “Our analysis suggests 4% is a key level for mortgage rates and one beyond which we would expect to see zero annual house price growth. Were rates to go even higher then modest price falls are a likely consequence as demand is squeezed and we see more of a buyers market”.

DATA: BoE reported another sharp rise in quoted mortgage rates in July

All quoted mortgage rates for two year fixes were well above 3% in July irrespective of loan-to-value ratio.

DATA: HMRC published quarterly SDLT statistics

The data shows the continued strong levels of activity at the top-end of the property market in England and Northern Ireland. Sales priced £1m-£2m were 97% higher in Q2 2022 than the same quarter in 2019 while sales priced over £2m were 129% higher. Sales priced under £500k were just 9% higher over the same period.

DATA: UK Finance published ranking of largest mortgage lenders in 2021

See Chart of the Week for more detail.

POLICY: Companies House launched Register of Overseas Entities

It “requires overseas entities that own land or property in the UK to declare their beneficial owners and/or managing officers”. They are recruiting volunteers for a user panel.

REPORT: BoE increased Base Rate to 1.75% and warn of recession

They expect CPI to hit just over 13% in Q4 2022 and project the UK to enter recession at the same time. The Monetary Policy Report warns “Housing market demand cooled in most parts of the UK, but continued to outstrip supply. Contacts attributed a slowdown in enquiries and online viewings in recent weeks to concerns about the rising cost of living, and noted that properties were selling at closer to asking prices than previously. There were also reports of lenders making lower mortgage offers than in recent months, reflecting the increased cost of living and higher lending rates”.

REPORT: Bank Underground blogged on “Who took out mortgage payment holidays during the pandemic”

The analysis found that while “many deferrals flowed to those whose finances had come under strain as a result of the pandemic”, there was evidence that “some applications could have been made for precautionary reasons”.

Chart of the Week

This week UK Finance published their rankings of UK mortgage lenders in 2021. The data shows the continued domination of the largest lenders in the market– the top five lenders accounted for 63% of gross lending and 66% of net lending in 2021. Equivalent data for buy-to-let lenders is expected soon.

Weekly Summary: 29th July 2022

DATA: BoE reported a fall in mortgage approvals for house purchase

The 3% monthly fall in the seasonally adjusted series for June meant the number of approvals was 4% below the pre-pandemic average (2014-19).

DATA: BoE reported the average mortgage on new advances hit 2.16%

The average for new advances was higher than the average rate on outstanding balances for the first time since 2014 and is likely to rise higher in coming months.

DATA: DLUHC reported 243,200 new build EPCs in year to Q2 2022

Energy Performance Certificates on new build homes have proven a useful leading indicator for net housing supply in England. The latest data suggests housing supply is continuing around the levels seen prior to the pandemic.

DATA: ONS published analysis of housing purchasing affordability

See Chart of the Week for more information.

DATA: DLUHC published statutory homelessness data for Q1 2022

The data, covering England, shows “74,230 households were initially assessed as homeless or threatened with homelessness and owed a statutory homelessness duty, up 5.4% from January to March 2021”.

DATA: DLUHC published social housing lettings data for 2020/21

The release for England shows there were 246,000 new social lettings in the year, a 20% fall compared to the previous year, most likely due to the pandemic.

POLICY: DLUHC announced plans to raise accessibility standard

They say “New homes will be more accessible for older and disabled people as the government today (29 July) confirms plans to raise the accessibility standard following full consultation of proposals”.

POLICY: DLUHC’s Building Safety Fund reopened for new applications

There is an online Leasehold Protections Checker to help check if you have to pay.

REPORT: JRF reported the need to focus on the existing housing stock

They propose reforms to alter the ownership and distribution of the country’s existing homes with a shift away from the private rented sector to homeownership.

REPORT: NHBC on avoiding unintended consequences in Future Homes

The report seeks to “identify the challenges and anticipate possible consequences” of the transition to the Future Homes Standard.

REPORT: Rightmove published “Green Homes Report”

The report investigates “the impact of greener home initiatives on sellers, buyers, landlords and home-owners”.

NEWS: Savills reported on activity in London’s £5 million plus market

They report the “Strongest half-year since 2006 for London’s super prime market”.

Chart of the Week

ONS published their analysis of housing purchase affordability. It found in 2020/21, the “average home sold in England cost the equivalent of 8.7 times the average annual disposable household income”. The data also calculates price to income ratios across price and income deciles. For example, the ratio comparing the lowest decile prices to lowest decile disposable income in the South East was 11.3. This is clearly unaffordable and highlights the income distribution of actual buyers is well above that of the general population in most regions. To illustrate this, we have chosen a simple ratio of 5 times income as a cut-off to identify what decile house price each income decile could afford across a selection of regions. It shows the 5th income decile in the North East could afford the 4th decile (or below) of prices while it falls to just the lowest decile of property prices in the South East and West Midlands. London remains unaffordable with it requiring the 8th income decile to afford the lowest decile of property (ignoring any impact of wealth).

Weekly Summary: 22nd July 2022

DATA: Rightmove reported asking prices rose 9.3% in the year to July

This was slightly lower than last month’s figure of 9.7%. They reported the “Number of new sellers coming to market is up by 13% compared to this time last year, although available stock is still 40% down on June 2019’s levels”. They also revised their year-end house price forecast up from 5% to 7%.

DATA: ONS reported UK house prices rose 12.8% in the year to May

This was higher than last month’s revised figure of 11.9% though annual comparisons will be volatile given the impact of the stamp duty holiday on last year’s house price index.

DATA: ONS reported another rise in Stamp Duty Land Tax receipts in June

Monthly receipts of £1.5 billion for all property types (residential & commercial) took the rolling annual total up to £16.6 billion, another record high.

DATA: HMRC reported an 8% fall in residential transaction in June

This left transactions 4% below their pre-pandemic average. While mortgage approvals have slowed in recent months, this fall was unexpected. It may reflect the affordability pressures building in the market but HMRC did warn that an update to their database “meant an additional number of returns relating to June 2022 transactions were unable to be processed in time for this publication”. They made an adjustment to account for this but we will have to wait for next month to see if this is the start of a trend or just a data issue.

DATA: DLUHC published data on Right to Buy sales and replacements

The data for 2021/22 showed Local Authorities reported 10,878 eligible sales and 5,089 replacements funded through the receipts from eligible sales.

DATA: ONS published 2021 data from the Regulated Mortgage Survey

Check out our Digging Deeper slide deck for analysis of this release.

POLICY: Government published plans to reduce nutrient pollution

The plans include: “A new legal duty on water companies in England to upgrade wastewater treatment works by 2030 in ‘nutrient neutrality’ areas to the highest achievable technological levels” and “A new Nutrient Mitigation Scheme established by Natural England” that will allow planning permission in areas with nutrient pollution issues.

POLICY: DLUHC launched a consultation on the Indices of Deprivation

REPORT: DLUHC and Homes England published annual reports for 2021/22

The Chart of the Week features analysis of the Help to Equity loan repayment statistics published in the Homes England annual report.

REPORT: JRF warn about rising energy bills and low income households

Their analysis suggests “low income families will hand over 26% of their income after housing costs in 2023/24 to pay for gas and electricity compared to just 12% two years previously”.

REPORT: Resolution Foundation published analysis of household wealth

It warns that “Low-income families are far more vulnerable to the cost of living crisis due to the absence of a savings buffer: the lowest income tenth of families were four-times more likely to have no savings than the richest tenth”.

NEWS: Zoopla valued the UK housing stock at more than £10 trillion

They report around one-third of homes have increased by more than £50,000 since the pandemic hit though this figure assumes all homes could sell at current prices.

Chart of the Week

The Homes England annual report provide a useful table (page 54) summarising the state of Help to Buy equity loan repayments. The table includes the number and cost of loans issued by year and how many of those have been repaid along with the associated receipts. For example, over half (53%) of Help to Buy equity loans issued in 2016/17 have now been repaid. The loans from this year originally cost £1.15bn and generated receipts of £1.22bn – an average return of 6.4%. However, by using previous versions of the same table we can begin to construct a picture of returns not just by when the loans were issued but also by the year they were repaid. The chart below shows this analysis and immediately highlights the impact of the recent housing boom on the value of the equity loans repaid – across nearly all vintages except those issued in 2013/14. Of particular interest is the 570 loans that were issued in 2020/21 and repaid in 2021/22 – they led to a return of 8%.

Weekly Summary: 15th July 2022

DATA: ONS reported month GDP rose 0.5% in May

This followed a revised fall of 0.2% the previous month and results in an annual change of 3.5% and GDP just 1.3% above its pre-pandemic peak in January 2020.

DATA: Rightmove reported asking rents rose 11.8% in year to Q2 2022

They reported “Average asking rents outside London have now jumped by 19% (+£177) in the two years since the pandemic started” with asking rents rising fastest in Manchester (23.4% annual change). They note that while “New rental listings are up 8% in June compared to the start of the year”, the number of available properties is 28% lower than last year. Meanwhile their survey suggests “more landlords are planning to expand their portfolios in the coming 12 months (34%) than reduce them (11%)”.

DATA: Bank of England published Credit Conditions Survey

Their survey showed “Lenders reported that the availability of secured credit to households decreased in the three months to end-May 2022” and they expect it to decrease slightly over the next three months. Meanwhile, “Lenders reported that demand for secured lending for house purchase increased in Q2, but was expected to decrease in Q3”.

POLICY: DLUHC published draft developer remediation contracts

Greg Clark wrote in the i that draft contracts have been sent to large developers that will “turn the building safety pledge into legally binding requirements”.

POLICY: DLUHC published their “areas of research interest”

The document sets out the department’s research and evidence priorities with eleven themes: Levelling up – COVID-19 recovery and future resilience – Housing – The planning system – Homelessness, rough sleeping, and policies to support vulnerable groups – Net zero carbon emissions and housing quality – Building safety – Devolution – Electoral registration, voting and electoral systems – Integration and communities – Cross-cutting research methodologies.

REPORT(PDF): RICS published June residential market survey

They reported “Demand and sales continue to cool although pricing trends remain relatively firm at this stage” with “new buyer enquiries slipped to -27%, down from a reading of -9% previously”.

REPORT: HBF published Q1 Housing pipeline report

The report shows the number of housing units that secured detailed planning permission across England fell to 306,436 in the year to Q1 2022 compared to 314,724 last quarter.

REPORT: Resolution Foundation published “Stagnation nation”

This is the interim report of The Economy 2030 Inquiry and highlights the “long-term slow growth and high inequality” of the UK.

REPORT: Centre for Cities published “Out of pocket”

The report investigates the impact of inflation on cities across England and Wales. It finds inflation is higher in the UK’s poorest cities with energy and petrol consumption accounting for most of the differences.

REPORT: Savills published quarterly report on development land

The report shows UK greenfield land values have risen 9.9% over the last year and are now just 1% below their pre-financial crisis peak.

Chart of the Week

It was a slow week for housing data so it provided an opportunity to update our Markets at a Glance analysis. Part of that analysis includes our estimates of regional transactions adjusted to deal with the Land Reg Lag. While the data suggests recent levels are closely following the pre-pandemic trend, it very clearly highlights the regional impact of the stamp duty holiday. It shows the massive impact the tax holiday had on higher value markets with the largest peaks and troughs in London and while the smallest were in the North.

Weekly Summary: 8th July 2022

DATA: Halifax reported UK house prices rose 13% in in the year to June

The annual rate of change increased from 10.7% last month, thanks largely to a 1.8% monthly rise. They reported this was “the twelfth consecutive monthly rise”.

DATA: Bank of England reported sharp rises in quoted mortgage rates

The data for June showed big rises in quoted mortgage rates across all loan-to-value ratios.

DATA: DLUHC published estimates of leasehold dwellings in England

The latest data for 2020-21 estimates that 20% of England’s housing stock are leasehold, 71% of which are flats.

POLICY: Greg Clark is new Secretary of State for Levelling Up, Housing and Communities

He was appointed following the sacking of Michael Gove.

REPORT: Transparency International published report on property ownership amongst parliamentarians

They report MPs are “three times more likely to own more than one residential property than the general public” with “at least 312 residential properties owned by 177 MPs” that are in addition to homes they or their family members live in.

REPORTS: DLUHC published English Housing Survey detailed reports

The reports add to the 2020-21 headline report published last December and cover topics including Energy, Feeling Safe From Fire, Housing Quality, Older People’s Housing, Owner Occupier Leaseholders, Private Rented Sector, and Social Rented Sector.

DATA: Bank of England published Financial Stability Report

It reports “major UK banks have considerable capacity to support lending to households and businesses even with the deterioration in the economic outlook” and “The shares of households with high cost of living adjusted DSRs on their mortgage debt or consumer credit are not projected to increase substantially” (DSR = debt-servicing ratio).

REPORT: Resolution Foundation published Living Standards Audit 2022

The report finds that the typical household income for non-pensioners grew by just 0.7% per year between 2004-05 and 2019-20. It also warns “the typical incomes of the poorest fifth of the population were no higher on the eve of the pandemic than they were back in 2004-05”. The lack of income growth is a major factor in the UK’s housing crisis.

REPORT: RTPI published a report on “Rural Planning in the 2020s”

The report “explores how land use planning can effectively support the delivery of sustainable development in rural areas”.

REPORT(PDF): Create Streets reported on “The case for community-powered planning”

Chart of the Week

Last week saw the announcement of 50 year mortgages as a potential solution for people struggling to buy their first home. It is not clear whether this idea will survive the current political turmoil but it is worth briefly investigating. As our chart below shows, the benefit of taking out a longer term mortgage is that you can borrow more relative to your income for any given mortgage rate and repayment ratio (fixed at 20% for the chart). However, the chart also shows the amount of extra borrowing that a longer term unlocks depends on the mortgage rate. For example, shifting from a 30 year term to a 50 year term when the rate is 2% increases the loan-to-income ratio by 40%. But this uplift falls to 24% when the rate is 4% and just 15% when the rate is 6%. There are many issues with longer mortgage terms including the cliff-edge at retirement, boosting house prices, and other risks more commonly found with interest-only mortgages but this may be an idea that only really has an impact when mortgage rates are very low (and loan-to-income ratios are unconstrained).

Weekly Summary: 1st July 2022

DATA: Nationwide reported UK house prices rose 10.7% in the year to June

This was another record high following 11 consecutive monthly increases.

DATA: Zoopla reported UK house prices rose 8.4% in the year to May

They reported the monthly change fell to its lowest rate since December 2019 at just 0.1%. They also suggest there are “Emerging signs of impetus in the market slowing, with activity receding from record highs” and expect annual growth to reach 3% by the end of the year.

DATA: BoE reported 66,163 mortgage approvals for house purchase in May

This was similar to last month’s figure and in line with the pre-pandemic average.

DATA: BoE reported a rise in the average effective rate on new advances

The average effective mortgage rate on new advances was 1.96% in May. That’s slightly higher than the 1.91% recorded in May last year but still just below the 2.08% on outstanding balances. This figure looks likely to rise rapidly in coming months.

DATA: ONS published first major outputs from the 2021 Census

The release shows the usual resident population of England & Wales on the 21st March 2021 was 59,597,300 people, an increase of 6.3% over the previous ten years. The Census is a fantastic resource but it took place during a national lockdown in the middle of a global pandemic. This makes it very difficult to assess which results were longer-term trends (including the impact of Brexit) and which were short-term reactions to the pandemic. It probably should have been delayed till 2022 like the Scottish Census. Among others, the GLA and Lichfields have published analysis on the release.

DATA: FCA published Mortgage Product Sales Data for 2021

See Chart of the Week for more detail.

DATA: ONS published data on average prices by number of bedrooms

POLICY: Review into short-term tourist accommodation launched

The consultation on developing a tourist accommodation registration scheme will run for twelve weeks and is available here.

POLICY: DLUHC warns freeholders as Building Safety Act comes into force

In a letter to building owners and managing agents, Michael Gove warns “it will become an offence to attempt to pass on costs for relevant work to qualifying leaseholders”.

REPORT: JRF reported on the hardships faced by low-income households

It finds “Low-income families have fallen behind on payments by an average of £1,600” and are being forced to choose between going without the essentials or getting into debt.

NEWS: Knight Frank revised their 2022 house price forecast

Their forecast has been revised up from 5% to 8% as “Supply is rebuilding more gradually than anticipated”.

Chart of the Week

This week the FCA published their latest mortgage product sales data. Although very backwards looking (it covers the period up to Q4 2021), the data provides a useful breakdown on important trends in mortgage lending – including regional data. We’ve published a Digging Deeper slide deck covering the data in more detail but this week’s chart looks at first time buyer mortgage sales at high loan-to-value (LTV) ratios.

The chart highlights the collapse in very high LTV (over 90%) lending during the financial crisis followed by the partial recovery in 2014 thanks to the introduction of the Help to Buy mortgage guarantee scheme. Lending volumes then fell during the market lockdown. Unlike the lower LTV market which quickly recovered when the market reopened, those at higher LTVs (over 85%) remained suppressed thanks to the credit crunch affecting both their availability and cost. However, first time buyer numbers were buoyant during this period as the fall in buyers using very high LTVs was more than compensated for by an increase in those borrowing between 75% and 85% of their purchase price. The higher LTV market then started to recover following the re-introduction of the mortgage guarantee scheme.

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