Weekly Summary: 11th June 2021

DATA: Halifax reported a new record high for UK house prices in May

The annual growth rate increased to 9.5% (previously 8.2%) with a 1.3% monthly rise.

DATA: ONS reported a 2.3% monthly increase in GDP in April

GDP was 6.1% higher than the same month last year but still 4% lower than January 2020.

DATA: Bank of England reported further falls in mortgage rates in May

Quoted rates for 60% LTV, 2 year fixed rates fell to 1.2%, the lowest ever. Rates for higher LTV products are falling but remain higher than before the pandemic.

DATA: ONS reported Construction Output fell 2% in April

Despite the fall, construction output was 0.3% higher than February 2020.

DATA: Bank of England & FCA released Mortgage Lenders & Administrators Return statistics for Q1 2021

The release provides a wealth of information on the mortgage market. See our Digging Deeper and Chart of the Week for more detail.

DATA: MHCLG released Energy Performance of Buildings Open Data

The release provides Energy Performance Certificate data for individual homes in England & Wales up to 31st March 2021.

REPORT: RICS reported “Solid demand and a shortfall of new instructions continues to drive house prices higher” in May

They reported that “New instructions continue to dwindle over the month” while “New buyer enquiries and agreed sales still displaying solid momentum”. They also reported that the rental market in London appears to be recovering “with both the three and twelve month rental growth expectations series moving into positive territory”.

REPORT: HCLG Committee report on The Future of The Planning System

The report looks at the Government’s proposed planning reforms and suggests that they reconsider the case for growth, renewal, and protect zones. It also suggests that people “must still be able to comment and influence upon all individual planning proposals” and they approve of the decision to abandon the proposed formulate for determining housing need. However, they would like clarity on how the “urban uplift” in housing delivery can be met. They also suggest “Government should set a limit of 18 months following discharge of planning conditions for work to commence on site” with permission revoked if work has not progressed and call on government to “lay out the evidential basis for its 300,000 housing units a year target and how it will achieve it, both by tenure and by location”.

REPORT: ONS released report on Rough Sleeping in the UK 2002 to 2021

The report compared statistics from across the UK to investigate trends in rough sleeping.

NEWS: Rightmove reported the “Biggest sales pipeline over past ten years”

They reported “More than 700,000 homes are marked Sold Subject to Contract and going through the sales process” while a survey suggested “only 4% [of buyers] would abandon their plans to buy a property if they missed either the June or September deadline”.

Chart of the Week

There is a wealth of information in the Bank of England and FCA’s MLAR data release but it also allows us to create relatively timely estimates for the number of mortgaged movers and first time buyers. Charting these estimates as a share of total transactions highlights some interesting trends in recent years. As the chart below shows, the proportion of transactions that were first time buyers had been consistently around 22% until the introduction of higher SDLT rates for investors buyers in early 2016 (grey bar). Since then first time buyers had gradually increased their share of transactions, reaching 31% in Q2 2020. However, the combination of the credit crunch, SDLT holidays for all buyers, and renewed demand from home movers have all contributed to reduce first time buyers’ share of transactions down to 25% in Q1 2021. We will have to see if this is just a temporary effect that disappears when the current SDLT holiday ends.

Weekly Summary: 4th June 2021

DATA: Nationwide reported a 10.9% annual rise in house prices in May

The highest annual growth rate since 2014 partly reflects the current market boom but also the decline in house prices reported by Nationwide during lockdown last year. If house price stay exactly the same next month, annual growth will still rise to 12.2%.

DATA: BoE reported 86,900 mortgage approvals for house purchase in April

Though lower than the 100,900 reported in December, this was still 31% higher than the average seen between 2014 and 2019. Mortgage approvals for remortgaging are still 23% below their pre-pandemic average.

POLICY: MHCLG launched flagship First Homes scheme

The first First Homes are apparently now available on a Keepmoat site. The picture on the MHCLG announcement matches this development on the edge of Shirebrook, in the East Midlands. With prices from £189,995 and offering 2, 3 and 4 bed houses, this is the kind of site where First Homes should easily work. It will be more interesting to see how well they work in locations where discounts bigger than 30% are required to bring house prices down below the price cap. Especially given weaker demand for flats in the current market.

REPORT: UK Finance released household finance review for Q1 2021

The report provides a useful review of mortgage market activity and highlights the large amount of home mover activity, thanks in part to large amounts of equity built up in recent years. They report that “half of all mortgaged homeowners have at least 50 per cent equity in their home, and a further third have between 25 and 50 per cent”.

REPORT: Lichfields released report on planning permissions

The report investigates the relationship between planning permissions and house building. As we also suggested, they say Government needs “an improved system for recording permissions, their relationship to land, and their implementation”.

REPORT: Knight Frank released Global House Price Index, Q1 2021

They report “the highest proportion (98%) of countries registering positive price growth on an annual basis” since they started their index in 2008. House prices are booming across the world which suggests it’s more than just the stamp duty holiday driving the UK market.

NEWS: JRF warned that “400,000 renters face eviction”

Their survey suggests 5% of renters “have either been served an eviction notice or have been told they may be evicted” while 11% are worried about being evicted and 20% are worried about paying their rent over the next three months. They are calling for “a targeted package of grants to support renters in arrears”.

Chart of the Week

This week’s chart looks at the relationship between overall homeownership and outright homeownership across English local authorities in 2019. As expected, most areas are towards the top of the chart with high rates of homeownership while only a few London boroughs and other cities have more renters than owners.

Perhaps of more interest is how areas have changed since 2012 which is indicated by the grey lines. Most areas have not moved vertically, suggesting similar overall homeownership rates. But there has been considerable movement towards the right hand side of the chart. This reflects our ageing society paying off their mortgage and becoming outright homeowners. Most local authorities now have more outright than mortgaged owners.

Weekly Summary: 28th May 2021

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

The annual growth rate in London was just 1.9% compared to 5.4% in Yorkshire and Humber. They also forecast the number of sales to reach 1.5 million in 2021 with a total value of £461 billion, 68% higher than the value transaction in 2019.

DATA: ONS reported a 14% monthly fall in SDLT receipts in April

The monthly fall was expected given the very high value of receipts in March and was similar to total receipts in April 2019, despite the ongoing stamp duty holiday.

DATA: Home Office reported visa statistics for the year to March 2021

The data showed a 37% fall in work-related visas compared to the previous year. The data also reported a 16% fall in Sponsored study visas and 13% fall in family visas and permits over the same period. See the Chart of the Week for more on student visa numbers.

POLICY: MHCLG provide further detail on First Homes

It is still not clear how successful the First Homes policy will be, with shared ownership perhaps the best comparison, and there are still concerns about its impact on the delivery of other affordable housing tenures.

REPORT: Regulator of Social Housing reported the “Social housing sector in good financial health despite pandemic challenges”

They report that in Q1 2021“4,453 affordable home ownership (AHO) units were developed and 4,555 were sold” which reduced the number of unsold homes to 7,369. They also reported “1,560 market sale units were developed and 1,684 were sold; the highest number of sales recorded since the data was first collected in 2014”. This reduced the number of unsold market sale homes to 1,901 in March.

REPORT: GLA reported on London population change due to the pandemic

The report concludes that it is “still too early to reliably quantify post-pandemic population change” but “it is hard not to conclude that the population of London is likely to have fallen since the start of the pandemic”. However they warn the scale of the fall is likely to be less than suggested in other analysis and the speed and size of the recovery is more important.

REPORT: Shelter reported on “the housing emergency”

They report that 17.5 million people are affected by it due to “living  in overcrowded, dangerous, unstable or unaffordable housing”. They conclude by calling for the government to commit to building at least 90,000 social homes per year.

Chart of the Week

Home Office data showed the total number of Sponsored study visas granted in the year to March 2021 was 16% lower than the previous year. However, there was considerable variation by nationality. Chinese nationals were still the largest number but were 26% lower than last year. Meanwhile, the number of Indian nationals granted visas was 13% higher than last year and continues to recover back to numbers last seen in 2010.

Weekly Summary: 21st May 2021

DATA: Rightmove reported a further rise in asking prices in May 2021

Their index was suspended this time last year so a year-on-year comparison is not possible. However, the two year % change increased to 8.2% from 7.3% the previous month.

DATA: ONS reported a 10.2% annual rise in house prices in March 2021

This was the highest growth since August 2007 though the Land Reg Lag continues to cause problems and could lead to revisions. Across English regions, house prices are rising fastest in Yorkshire & Humber (14.0%) and slowest in London (3.7%).

DATA: HMRC reported a 36% monthly fall in transactions in April 2021

Despite the expected fall (due to the late extension of the stamp duty holiday), the number of transactions in April was still 19% higher than the 2013 to 2019 average.

DATA: ONS reported labour market statistics

They suggest the statistics show “the jobs market has been broadly stable in recent months, with some early signs of recovery”.

DATA: MHCLG released English dwelling stock estimates for 2020

The changes in number of dwellings were already available via the net supply publication but these estimates also include a breakdown by housing tenure: see Chart of the Week.

REPORT: Bright Blue released “Home Truths” report on property taxation

The report by Cheshire and Hilber suggests replacing Stamp Duty Land Tax and Council Tax with an Annual Proportional Property Tax. While potentially sensible in theory, in practice politics is increasingly dominated by an older income-poor, asset-rich group of people which could limit the ability to actually implement a tax system like this.

SPEECH: Bank of England’s Jon Cunliffe on housing’s quiet decade

He looks at why prices and transactions were “relatively muted” over the last ten years.

MAPS: British Geographical Society released maps showing the “real threat of climate-related subsidence to British homes and properties”

Their analysis shows “Most susceptible are properties in the highly-populated London areas, particularly in northern and central London boroughs, and Kent in the South East”.

Chart of the Week

MHCLG’s dwelling estimates by tenure for 2020 show that, at 15.7 million, the number of owner occupied homes in England was the highest ever. That’s 600,000 higher than the previous peak in 2005 and 1.1 million higher than 2014. While the recovery in first-time buyer numbers has helped in recent years, the biggest driver of the increase is the large and predominately homeowning baby boomer generation ageing and replacing smaller numbers of previous generations that had lower homeownership rates. Meanwhile, despite the widespread predications of its continued rise and thanks to tax changes, the private rented sector has been stuck at around 4.8 million homes since 2015.

Weekly Summary: 14th May 2021

DATA: Halifax reported house prices rose 8.2% in the year to April 2021

A 1.4% monthly rise increased the annual rate to 8.2% from 6.5% in March. 8.2% is “the highest annual growth rate in 5 years”.

DATA: ONS reported a 1.4% annual rise in monthly GDP in March 2021

However, the pandemic had already had an impact on the economy in March 2020 and a more useful comparison shows GDP is still 6.2% lower than January 2020.

DATA: BoE reported a fall in mortgage rates across all LTVs in April

The average quoted rate on a 95% LTV, 2 year fixed rate mortgage is now below 4% for the first time since September but still has a long way to go before it returns to last year’s rate.

DATA: Zoopla reported mixed results in their Q1 2021 rental index

London rents continued to fall, down 9.4% over the year, with some other cities also reporting falls in rents (Edinburgh, Manchester, Leeds). However, UK rents excluding London rose by 3% over the year, reflecting the challenges facing prospective buyers, renters’ changing preferences, and the recovering economy.

DATA: MHCLG reported 220,726 new build EPCs in 2020/21

Energy Performance Certificates (EPCs) are a useful leading indicator for new housing supply. See the Chart of the Week below for more on the trends in the latest data.

DATA: MHCLG reported 21,000 H2B equity loan completions in Q4 2020

This was the largest number of completions in a quarter since the scheme began and was 40% higher than Q4 2019. This probably reflects both the wider squeeze on high LTV mortgages encouraging first time buyers to buy a new build and the rush to complete before the end of the scheme.

DATA: UK Finance reported small increases in mortgage arrears in Q1 2021

However, just 0.9% of homeowners and 0.3% of buy to let investors have arrears of over 2.5% of their mortgage balance, which is similar to recent rates and well below the rates seen in the financial crisis.

DATA: Ministry of Justice reported possession workload for Q1 2021

Claims issued and total orders for both mortgage and landlord possessions increased compared to the previous quarter but remain well below normal pre-pandemic levels.

DATA: RICS residential market survey reported “Strong demand and a lack of new instructions driving prices higher”

They reported “Demand growth increasingly outstripping supply” with “House price inflation accelerates further across the UK” while a “Lack of supply also evident across the lettings market”.

POLICY: Queen’s Speech includes Planning Bill, Building Safety Bill, Leasehold Reform (Ground Rent) Bill, and Renters’ Reforms

While we await further detail, it appears unlikely that the Planning Bill will manage to deliver on the proposals set out in last autumn’s Planning white paper.

REPORT: OSR review of population estimates and projections

The review found the “ONS takes a sensible approach to measuring the population” but there are challenges in measuring migration which can cause issues in areas with large numbers of students. This is a useful reminder about the many limitations in using population projections to assess where new housing should be delivered.

REPORT: CCHPR reported on leasehold and freehold charges

The report for MHCLG identified “a lack of comprehensive, detailed national data about the different charges” and it “is an area of significant complexity in legislation, policy and practice”. More needs to be done to help prospective buyers.

REPORT: Bank of England on “The consumption response to borrowing constraints in the mortgage market”

The reports investigates the impact of the Help to Buy scheme and suggests it boosted household consumption alongside home purchases. We have some concerns about the failure to investigate the mortgage guarantee and equity loan schemes separately.

Chart of the Week

Energy Performance Certificates (EPCs) have proven themselves as reliable lead indicators for new housing supply across England with weekly data showing the new build market quickly recovered back to normal levels when the housing market reopened last summer. However, we have had to wait until this week for more detail on where and what has been built in recent quarters as MHCLG have taken over the management of the EPC database and this required additional time to ensure the quality of the data.

We now have that data and it shows some interesting trends. For example, the chart below shows the quarterly trend in EPCs by property type and suggests that the lockdown had a bigger negative impact on the delivery of new houses than flats. This might sound counter-intuitive given the widespread reports of struggling city centres. However, it reflects the fact that it is easier to start and stop the construction of new houses to match changes in demand. Meanwhile, once a block of flats is started, you need to finish them all before you can complete on one. Therefore, even when faced with a pandemic or financial crisis, developers of flats may rush to complete even if it means taking a hit on their profit given the costs of construction and risk of holding an unfinished, unsellable shell.

Weekly Summary: 7th May 2021

DATA: Bank of England reported a 5% monthly fall in approvals for house purchase in March

Despite the monthly fall, approvals for house purchase were 45% higher than the same month last year. Approvals for remortgage are 18% lower than the same month last year.

DATA: Bank of England reported record high net secured lending in March

Net secured lending was 122% higher than last year. See chart of the Week for more.

DATA: ONS released subnational housing tenure estimates, England: 2019

The estimates include data on the number and proportion of households and dwellings by local authority across England. The data covers years from 2012 to 2019.

POLICY: Government plans to publish Levelling Up White Paper

The paper is due later this year.

REPORT: Bank of England released Monetary Policy Report, May 2021

The report warns that “There is uncertainty around the evolution of the pandemic and how people respond”. Given the increase in household savings during the pandemic, they report “Spending could recover more rapidly if households with accumulated savings choose to run them down by more” but there is a warning about the inequality in who has saved with older/higher income households tending to spend less of any extra savings.

REPORT: Nationwide/The Mortgage Works released Rental Market Review

They report that the private rental market is “in retreat pre-pandemic after a long period of expansion” and the “Post-pandemic rental market outlook clouded by economic uncertainty and shifts in housing preferences”.

REPORT: Resolution Foundation released Housing Outlook Q2 2021

The report includes analysis showing “House prices have risen faster in less populated areas of the UK than denser areas over the Covid-19 period”.

REPORT: Savills reported on the issue of carbon in property

The report explores policy requirements, investor priorities, and occupier attitudes to real estate in a low carbon economy with a warning that some property could become “stranded assets” if they fail to adapt.

CONFERENCE: UK Finance hosted Mortgage Conference 2021

We usually avoid linking to content that requires details to read or view but the recordings are currently free for non-members and useful for insight on lenders’ views of the market.

Chart of the Week

Net secured lending increased by nearly £12 billion in March 2021, the highest level since the Bank of England data began and, given inflation and the evolution of the mortgage market, probably the highest ever. The large increase reflected the substantial number of transactions completing in March as they sought to beat the now extended stamp duty holiday deadline.

While eye-catching and more than making up for the subdued lending during lockdown last year, all our attention is on what will happen to activity and lending next. There are continued reports of high numbers of sales agreed and higher than normal levels of mortgage approvals but a lack of homes for sale is limiting activity in some areas and it’s still not clear whether this is a temporary boom, one-off adjustment, or new normal.

Weekly Summary: 30th April 2021

DATA: Nationwide reported a 2.1% monthly rise in house prices in April

The annual rate of change rose to 7.1% from 5.7% the previous month.

DATA: Zoopla reported a 4.0% annual rise in UK house prices in March

They reported house prices are rising fastest in Manchester (6.5%) and Leeds (6.3%) with lower growth in London (1.8%) and Oxford (1.6%). Prices continued to fall in Aberdeen.

DATA: HMRC released Stamp Duty Land Tax statistics for Q1 2021

Residential transactions were 53% higher than one year ago but receipts were 0.2% lower thanks to the stamp duty holiday. The biggest percentage increase in transactions by price band when compared to a year ago was for those priced £500,000 to £1 million.

DATA: Rightmove reported a 4.2% annual rise in asking rents in Q1 2021

However, asking rents in London have fallen 7.8% over the last year with a 14% fall in Inner London. They also reported that asking rents in Inner London are down 6.5% over the last five years while in Outer London they have risen by 2% over the same period.

POLICY: MHCLG launched Self and Custom Build Action Plan

The action plan includes the £150 million Help to Build scheme, which is similar to Help to Buy by providing an equity loan on the completed home. They have also commissioned the “Bacon Review” to “establish a plan to scale up self and custom build homes to boost capacity and overall housing supply and provide recommendations to government”.

POLICY: Fire Safety Bill passed without protection for leaseholders

Despite efforts to protect leaseholders from being landed with building remediation costs, the unamended bill has now passed and been sent for Royal Assent.

POLICY: HMRC launched Residential Property Developer Tax consultation

As part of the Building Safety Package, the government intends to tax residential property developers and is looking to raise at least £2 billion over a decade.

Chart of the Week

This week ONS released their preliminary estimates of the national balance sheet for 2020. The data showed the UK’s net worth was £10.5 trillion, a 4.4% increase compared to the year before. They reported that “Households continue to drive growth in the UK’s net worth and accounted for 9.4 percentage points of growth in 2020” with falls in the net worth of government and financial corporations lowering the overall figure.

One-third of the increase in households’ net worth was due to rising house prices with the value of land owned by households now worth £4.3 trillion, up 10%, while the homes and other buildings on the land saw no change, at £1.6 trillion. However, it is worth noting that this “land value” reflects the locational value of homes rather than the cost of development land. For comparison, the latest Savills research on development land values reported no change in greenfield land values and a 0.8% rise in urban values in the year to Q1 2021.

Weekly Summary: 23rd April 2021

DATA: Rightmove reported an annual rise of 5.1% in asking prices in April

This took their index to its highest ever level. They also reported sales agreed were 55% higher than two years ago with not enough new listings to meet buyer demand.

DATA: ONS reported an 8.6% annual rise in house prices in February

With a 0.5% monthly rise, the completion based index is continuing to report high growth.

DATA: HMRC reported 191,000 transactions in March

There were 92% more transactions in March than the 2013-19 monthly average as the late extension of the stamp duty holiday still led to a rush of activity. Despite the high levels of transactions in recent months, the market shutdown last year means the total number of over the last year was 1.2 million. This is very similar to the annual totals seen since 2013.

DATA: ONS reported £1.3 billion in stamp duty land tax receipts in March

The data shows there are a large number of transactions that are liable for stamp duty.

POLICY: MHCLG launch mortgage guarantee scheme

The scheme is intended to increase the availability of high loan-to-value mortgages and replicates the original scheme launched in 2013. See Chart of the Week for more detail.

REPORT: MHCLG release Household Resilience Study: Wave 2

The survey found that “Mortgage arrears have returned to pre-pandemic level” but “Private rental arrears remain higher than they were pre-pandemic”. It also reports “Private renters and those with a mortgage were more likely to say that their household income had decreased” and “Overcrowding has increased, particularly in the private rented sector”.

REPORT: House of Commons Library on “What is affordable housing?”

The briefing paper looks at definitions of affordable housing and assesses the affordability of housing across different tenures.

Chart of the Week

The re-launch of the guarantee scheme should help improve the availability of higher loan-to-value (LTV) mortgages but it is only really fixing the short-term impact of the pandemic. That is the decline in the last few quarters on the chart below. The longer term issues of high house prices relative to incomes and tighter mortgage regulation remain in place.

Although the mortgage guarantee got most of the attention this week, it was Nationwide’s new product that could end up being much more important. They suggest buyers could borrow 5.5 times their income at up to 90% LTV thanks to changes in the stress test rate they apply on mortgages with longer fixed rate periods. Mortgage borrowers are stress tested on the rate they will be on in five years time with most tested on the lender’s revert-to-rate plus 3%. In theory, if the borrower has a five year plus fixed rate period, they could just be tested at that typically lower rate. However lenders have tended to stick to testing at the higher rate due to concerns around conduct risk: encouraging buyers to pay more on longer term fixed rate periods in order to borrow more is not a good look. Until now.

From Nationwide’s release it appears they have satisfied themselves and the regulators that they can use this approach appropriately. By doing so, they can now lend more to borrowers where the stress test was a constraint. This could be a significant change in the mortgage market and it’s possible that Nationwide’s approach does more to deliver on the government’s manifesto promise of turning generation rent into generation buy than their own guarantee scheme. However, this solution doesn’t fix all the barriers to home-ownership as the soft cap on loans above 4.5 times income will limit numbers, saving a deposit is still a big barrier for many, and this approach could just help the current generation but end up pushing up house prices beyond the reach of future generations.

Weekly Summary: 16th April 2021

DATA: ONS reported a 7.8% annual fall in GDP in February

ONS estimates that GDP grew 0.4% in February but is still 3.1% below October’s level. This data is subject to significant revisions with January’s figure revised to -2.2% from -2.9%.

DATA: ONS reported 1.6% monthly growth in Construction Output in Feb

Construction output was 4.3% lower than February 2020 though activity in the private housing repair and maintenance and infrastructure sectors was above last year’s level.

DATA: MHCLG reported Q4 2020 Right to Buy statistics

Right to Buy sales fell 40% compared to the same quarter in 2019 and the number of new homes funded by recycled receipts overtook the number sold in a quarter for the first time.

DATA: Bank of England reported Q1 2021 Credit Conditions Survey

The survey shows an increase in the availability of secured lending for households over the last three months (to end of Feb) and lenders expect a large increase over the next three months. Demand for secured lending fell over the period, possibly reflecting the original end of the stamp duty holiday, but is expected to recover in the second quarter.

DATA: ONS release early indicators of UK population in 2020

The preliminary estimates suggests the UK’s population was 67.1 million at June 2020, and grew by just 0.5% compared to the year before. See Chart of the Week for more detail.

REPORT: Intergenerational Foundation report on “Stockpiling Space”

They report on the “unfair distribution of housing space in the UK” and how the pandemic has made the situation worse. The include a number of policy recommendations.

REPORT: Centre for Policy Studies report on “The Housing Guarantee”

The report calls for “changes to the planning system to open up the market and allow better access for small and medium sized companies and to diversify the housing supply.”

REPORT: Knight Frank release London Tall Buildings Survey – 2021

They report a “slight slowing” in the pipeline of tall buildings in London (20+ storeys) due to the pandemic but the total number of buildings is high at 587 with almost 90% residential. Given the construction and funding processes for this type of project, once construction has started, many are likely to continue to completion even if the market for them is weaker.

REPORT: Savills report on UK Student Accommodation

They report a “record-breaking year for investment” with £5.77 billion spent. This was largely accounted for by Blackstone’s £4.7 billion purchase of iQ Student Accommodation.

Chart of the Week

We still don’t know what has happened to the UK’s population during the pandemic and probably wont until Census data is released next year. In the meantime, ONS have published an early indicator for what might have happened in the year to June 2020 and scenarios for what might have happened since then.

As the chart opposite shows and due to the scale of migration before the pandemic, it’s likely that the UK’s population grew through to the middle of 2020 but at a slower rate than projected by the 2018 projections. There is more uncertainty about what has happened since then and the two scenarios of +100,000 and -100,000 net migration opposite illustrate the potential outcomes on the UK’s population though they only equate to a difference of 0.3%.

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.