Weekly Summary: 19th April 2024

DATA: ONS estimated monthly GDP fell 0.2% in year to Feb 2024

They report GDP increased 0.2% compared to the previous month and was 1.6% higher than the pre-pandemic peak in January 2020.

DATA: ONS published UK labour market overview

They report the unemployment rate increased to 4.2% and the employment rate fell to 74.5%. They also report inflation adjusted weekly earnings growth remained positive while the number of job vacancies fell further.

DATA: ONS/HMLR reported house prices fell 0.2% in the year to Feb 2024

This was less negative than the -1.3% reported in January. They also report a wide spread in country/region annual price changes, with Scotland recording a 5.6% rise and London recording a 4.8% fall in the year to February 2024.

DATA: ONS reported private rents rose 9.2% in the year to Mar 2024

This was slightly higher than the 9.0% recorded in February. They report annual rental inflation was highest in London at 11.2% and lowest in the North East at 6.1%.

DATA: BoE reported rises in quoted mortgage rates in Mar 2024

They reported the average rate at 75% loan-to-value and fixed for two years increased from 4.77% in February to 4.97% in March. The rate for a five year fix increased from 4.40% to 4.53% over the same period. The average variable rate and revert-to-rate were unchanged at 5.69% and 7.92% respectively.

DATA: ONS published analysis on rebased population estimates

Based on analysis of rebased mid-year population estimates between 2012 and 2021, they find “Large cities with university campuses were more likely to have high unattributable population change (UPC), which is defined as change to our population estimates that could not be explained by our components of change”.

DATA: BoE published Credit Conditions Survey for Q1 2024

They report “Lenders reported that the availability of secured credit to households increased in the three months to end-February 2024 (Q1). It was expected to increase over the next three months to end-May 2024 (Q2)” and “Lenders reported that demand for secured lending for house purchase and remortgaging increased in Q1, and both were expected to increase in Q2”. They also report “Lenders reported that default rates on secured loans to households” and were expected to increase in Q2.

REPORT: DLUHC & HE published review of Homes England

The review included a number of recommendations including “Authorise Homes England to take more risk to deliver more impact; to make its programmes easily accessible to small and medium-sized enterprises (SMEs); and to be even bolder by playing the role of master developer on more large regeneration and placemaking schemes” and “Transfer responsibilities for the Help to Buy scheme and Building Safety Programme out of Homes England in the medium term”, along with “changes to Homes England’s funding arrangements in the next spending review to allow it to commit to large, long-term schemes and to grant it larger delegations”.

REPORT: BoE published Bernanke review of Bank of England forecasting

The review’s recommendations include “a revamped forecasting framework” with more detailed models of subsectors including housing. Hopefully it would be more robust than the old OBR housing market model.

REPORT(PDF): RICS published March residential market survey

They report “Sales expectations improve slightly at both the three and twelve-month time horizons” while “New buyer enquiries continue to rise at a gentle pace, with new listings activity also picking up”, and their “House price indicator moves into neutral territory while twelve-month expectations point to an upward trend emerging”.

REPORT: Resolution Foundation published “Through the roof” briefing

They report “Earnings are a key driver of rental prices with the ratio of rents to earnings broadly stable around a slowly-falling trend between 2000 to the eve of the pandemic” but “the pandemic significantly disrupted the relationship between rents and earnings” and “at the start of 2022, rents were sitting around 5 per cent (or £50 per month) lower than we would have expected were the relationship between rents and earnings to have kept up with longer-term trends”.

REPORT: NHF reported on supported housing need

They report “As of 2023, there are an estimated 509,873 supported homes owned by registered providers of social housing in England” and “We will need 167,329 more homes by 2040” while “Most supported housing will be needed by older people”.

REPORT(PDF): CIH reported on “Delivering Scotland’s affordable housing”

They “set out the options available to social landlords as they respond to Scotland’s housing emergency” with a number of different options for delivery.

REPORT: Centre for Cities called for a 2026 “corrections” Census

They highlight the issues with London’s population data caused by the timing of the 2021 Census and the impact this might have on allocating public funding. We support this call.

REPORT: Localis reported on “Housing by Popular Demand”

The collection of essays provides detail on their views of “what a successful planning system that generates community support for development might look like”.

REPORT: SMF reported on alternatives to traditional homeownership

They suggest “Co-operative housing offers tenants greater security of tenure and lower rents than the private sector, but the UK makes less use of housing co-operatives than other Anglosphere countries, and far less than Scandinavia” but “cooperative housing requires residents to be involved in running the co-op, and require government support to overcome challenges relating to their legal status, finance and funding, education and finding land”.

REPORT: SMF reported on how planning reform can boost housing supply

They suggest “While planning reform is a useful tool and is necessary to increase housing supply, it is not sufficient: it is far from a sure bet” and “the size of the impact of planning reform on supply has been limited by its constrained scope and modest ambition, and other regulations such as limits to building size can continue to hold back developers”.

REPORT: Savills published Build to Rent Market Update, Q1 2024

They report “The first quarter of 2024 has been muted, with fewer investment deals closing, after a flurry of transactions at the end of last year”.

REPORT: Knight Frank reported on the single-family housing rental market

They report “The single family housing (SFH) sector in the UK is rapidly gaining momentum. Investors spent a record £1.9 billion acquiring or funding more than 6,200 homes last year, up fivefold from £388 million in 2022. In total, SFH investment accounted for just over 40% of all Build to Rent (BTR) investment last year”.

REPORT: TwentyCi published Property & Homemover report, Q1 2024

They report “The supply of New Instructions is up by 12% compared to Q1 2023. This is edging closer to 450k per quarter and a level consistent with a ‘normal’ market” and “Sales Agreed are up by 15% as the mortgage market stabilises”.

REPORT: IEA reported on what a housing crisis free Britain might look like

Unfortunately, the report uses erroneous data on the size of homes in this country. See Chart of the Week for more detail.

BLOG: TCPA blogged on planning reform

They highlight “The seven deadly mistakes of planning reform”.

BLOG: LSE blogged on solving the housing crisis without building homes

They suggest building more homes isn’t working “and does little to address inequality and the environmental impacts of construction. Instead, governments should be pursuing innovative policies that make efficient use of the existing housing stock”.

CORPORATE: Unite Students published Trading Update

They report “Continued strong demand with 86% of beds sold for the 2024/25 academic year (2023/24: 90%)” and are “Confident in delivering rental growth of at least 6% for the 2024/25 academic year”.

CORPORATE: Winkworth published Final Results

They report “2024 has had a stronger start than expected, with our sales agreed to the end of March 23% ahead of the same period in 2023” and they have “witnessed some price weakening in the rental market with supply increasing (29% ahead of 2023 to end of March 2024) and demand declining (5% behind 2023 to end of March 2024)”.

CORPORATE: Foxtons published Trading Update

They report “Foxtons’ sales agreed in the quarter were 31% higher by volume compared to Q1 2023. At the end of March 2024, the value of the under-offer pipeline was 34% higher than 2023 and 12% higher than 2022”.

Chart of the Week

The last couple of weeks have seen a resurgence in one of the most popular zombie statistics about the UK housing market: that we have the smallest homes in Europe at just 818 ft² (or 76 m²). Unfortunately, it appears this figure is based on the average size of homes built since 1980 as measured in 1996! More accurate data (chart below) suggests the average size of homes is 97 m² (1,045 ft²) which would be about average for Europe. Meanwhile, Energy Performance Certificate data for new build properties suggests the average size for has been about 91m² (980 ft²) for those built over the last decade in England. Comparing international housing data is extremely difficult and it’s tricky enough trying to get equivalent data for the UK – most dwelling size data is actually for England only even if labelled UK. Rather than a problem with the average size of homes, the real issue is the distribution of home sizes, with larger homes in the owner occupied sector and too many small homes with cramped households in the rented sectors.

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