Weekly Summary: 18th March 2022

DATA: DoF reported house prices in Northern Ireland rose 7.9% in 2021

See Chart of the Week for more detail on house prices in Northern Ireland.

DATA: ONS published UK labour market statistics

The latest release shows a continued recovery in the labour market with falling unemployment and rising numbers of payrolled employees. However, while nominal earnings are still rising, inflation-adjusted total pay grew just 0.1% over the last year while regular pay (excluding bonuses) fell 1% thanks to the rising cost of living.

DATA: BoE published Q1 2022 agents’ summary of business conditions

They reported “Demand in the housing market remained strong, in particular among first-time buyers, and outstripped the supply of available properties” and “house price inflation remained elevated in some areas, though contacts said there were early signs that house price growth may be slowing”. Meanwhile, “Demand for rental properties also outweighed supply, leading to continued upward pressure on rents”.

DATA: HM Treasury published independent forecasts, March 2022

The summary of independent forecasts for the UK economy shows house prices are predicted to rise in 2022 by 5.0% according to City based forecasters and 3.6% according to non-City based forecasters. Meanwhile, both groups expect real household disposable incomes to fall in 2022 (-1.2% and -0.7% respectively).

POLICY: DLUHC launched “Homes for Ukraine” scheme

The scheme asks sponsors to “provide homes or a spare room rent-free for as long as they are able, with a minimum stay of 6 months. In return, they will receive £350 per month.” There have been numerous concerns about this scheme and it does little to compensate for our woeful approach to Ukrainian refugees when compared to our European neighbours.

POLICY: BoE increased Bank Rate to 0.75%

The Bank of England’s Monetary Policy Committee voted by a majority of 8-1 to increase Bank Rate by 0.25 percentage points, to 0.75%.

REPORT: JRF reported on poverty in Northern Ireland

The report found that, as the country entered the pandemic: “nearly one-in-five people in Northern Ireland lived in poverty, including over 100,000 children”. Alongside other recommendations, they suggest building more energy efficient social housing and continuing the drive to regulate the private rented sector more effectively.

NEWS: CMA frees thousands of leaseholders from rising ground rents

They report “Fifteen businesses which had bought freeh­olds from housing developer Countryside have now given formal commitments – known as undertakings – to the Competition and Markets Authority (CMA) to remove terms that cause ground rents to double in price”.

NEWS: Barclays published first time buyer index for 2021

The press release contains some interesting statistics on first time buyers with the survey suggesting that most first time buyers “start saving for their first property at the age of 24, whilst average age at completion is 32” and “More than half (56 per cent) of first time buyers are reliant on family support”.

Chart of the Week

House prices in Northern Ireland are rising rapidly – up 7.9% in 2021 – but prices are still well below (-29%) their previous nominal peak recorded in Q3 2007. Although prices are yet to reach these previous highs, this -29% figure can be misleading given the speed of the housing boom and bust in Northern Ireland. While those that bought at the very top of market may be waiting decades for their home’s value to recover, the rapid rise in house prices during 2006 and 2007 means that, on average, it is just those that bought between Q3 2006 and Q3 2008 that are yet to see their home’s value recover to previous levels. For example, those that bought in Q2 2006 – the early stages of the boom – have seen their home’s value recover and is now, on average, 11% higher than when it was bought.

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