Weekly Summary: 15th December 2023

DATA: Rightmove reported asking prices fell 1.1% in year to December

They report the monthly price fall of 1.9% was slightly larger than usual for this time of year and “sales agreed for the year to date in 2023’s more challenging market are only 13% lower than the same period in the more frenetic 2022”. They also predict “new seller asking prices will drop nationally by an average of 1% in 2024”.

DATA: ONS estimated monthly GDP rose just 0.3% in year to October

They report “real gross domestic product (GDP) is estimated to have shown no growth in the three months to October 2023, compared with the three months to July 2023”.

DATA: ONS published UK labour market review

Data on employment and unemployment is still compromised by issues with the Labour Force Survey. They report “Annual growth for regular earnings (excluding bonuses) is down on the previous periods but is still among the highest annual growth rates since comparable records began in 2001” and was positive in real terms.

DATA: DLUHC published English Housing Survey 2022-23 headline report

See Chart of the Week for more detail.

DATA: Scottish Government published Scottish Household Survey 2022

The survey includes data on several different topics including housing and tenure.

DATA: BoE/FCA published Mortgage Lenders and Administrators Stats

The release shows a bounce in gross advances during Q3 2023, but net commitments suggest it will fall back in Q4. There was also a record high proportion of joint rather than single income borrowers, and arrears continued to rise, albeit slowly.

DATA: Homes England published housing statistics for H1 2023/24

They report the number of housing starts and completions delivered through programmes managed by Homes England were 23% and 9% lower than last year, respectively.

DATA: Scottish Government published housing statistics for Q3 2023

They report housing starts in the year to Q3 2023 were 24% lower than the same period last year while the number of completions was 6% lower over the same period.

POLICY: DLUHC published annual report and accounts

“This annual report sets out the activities of the Department for Levelling Up, Housing and Communities over the past year”.

POLICY: DLUHC consultation on Future Homes and Buildings Standards

The consultation sets out DLUHC’s “plans for achieving the Future Homes Standard and Future Buildings Standard”. It also includes a consultation on replacing the Standard Assessment Procedure (SAP) for the energy rating of homes with the Home Energy Model.

POLICY: Bank of England’s MPC voted to hold bank rate at 5.25%

The “MPC voted by a majority of 6–3 to maintain Bank Rate at 5.25%. Three members preferred to increase Bank Rate by 0.25 percentage points, to 5.5%”.

REPORT(PDF): RICS published November residential market survey

They report “Near-term sales outlook improves somewhat, supported by slightly lower mortgage rates” and “Current activity metrics remain negative but to a lesser degree than in recent months”.

REPORT: DLUHC reported on the social value of brownfield development

They report “Overall, households in England place significant value on the redevelopment of brownfield sites. This value stems from the removal of the disamenity generated by sites that negatively impact local communities, and the enhancements that developments can bring in terms of new facilities and improved quality of place”.

REPORT: Resolution Foundation reported on the cost of living

They report “although mortgagors may have been less likely than renters to have experienced a housing cost rise, when they did, it was bigger: mortgagors whose payments had gone up faced a typical rise of almost a quarter (23 per cent), rising to 28 per cent among young mortgagors (aged 25-34)”.

REPORT: Resolution Foundation reported on LHA uprating over time

They report “The stop-start practice of LHA [Local Housing Allowance] uprating causes serious problems for low-income renters”.

REPORT(PDF): Zoopla reported rents rose 9.7% in year to October

They expect “annual UK rental growth to halve over 2024 to 5%, the lowest growth since 2021” as demand falls and supply increases. However, their measure of demand is still 32% above the five-year average while the stock of homes for rent is 18% lower.

REPORT: BoE published Agents’ summary of business conditions 2023 Q4

They report “Confidence in the secondary market is still fragile, but a handful of contacts suggest that it has reached a trough. Contacts anticipate prices over the next year may decrease by less than expected at the time of the last update”.

REPORT: BIS reported on international macroprudential policies

They report that while macroprudential policies can “mitigate financial-stability risks arising from housing market boom-bust cycles”, the “Successful mitigation of the boom-bust cycles in housing markets requires consistency across housing-related policies including tax, planning and land supply”.

REPORT(PDF): Halifax published first-time buyer report

They report first time buyers are “Looking further afield” for a home they can afford and around 46% are “now willing to consider homes up to a quarter smaller than their ideal size”. They report 87% would like to own their own home but 41% have delayed buying.

NEWS: UK Finance published mortgage market forecasts

They forecast “Gross lending to fall by a further five per cent to £215 billion”, “Lending for house purchase to fall by a further eight per cent to £120 billion”, “Buy to let purchase lending to fall by a further 13 per cent to £7 billion”, and “Arrears to increase to 128,800 cases by the end of 2024”.

CORPORATE: Springfield Properties published Trading Update

They report “Demand in private housing remained stable but subdued” in their first half and have “Recommenced signing new affordable-only housing contracts”.

Chart of the Week

The English Housing Survey provides a wealth of information on the housing situation of households and dwellings. The latest headline report highlights the increase in outright owners, the increase in those reporting difficulty in affording their rent or mortgage, an increase in first time buyers using a gift from family and friends, and the improvement in the energy efficiency of the housing stock over the last decade. Today’s Chart of the Week is a relatively simple one. It shows the proportion of households in each tenure with no savings. Around one-third (34%) of households reported no savings across all tenures, totalling over 8 million households in England. However, as the chart shows, there is considerable variation across the tenures. Ranging from 14% of those who own outright (1.1 million households), to 29% of mortgaged owners (2.1 million), 46% of private renters (2.1 million), and 73% of social renters (2.9 million). This suggests the financial resilience of many households is fragile, especially after the events of the last four years.

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