Weekly Summary: 22nd March 2024

DATA: Rightmove reported asking prices rose 0.8% in year to 9th Mar 2024

They also reported “The number of sales being agreed is now 13% higher than at this time last year” and “Buyer demand is now 8% above last year, led by the less mortgage-rate-sensitive larger homes sector and London”. However: “The average time to find a buyer is 71 days, the longest at this time of year since 2019”.

DATA: ONS reported UK house prices fell 0.6% in year to Jan 2024

As part of the launch of the new combined house price and rental index release, they have revised the historic data – see Chart of the Week. ONS also published a “Housing prices in your area tool”.

DATA: ONS reported private rents rose 9.0% in year to Feb 2024

This provisional estimate was higher than the 8.5% for the previous month and marks the release of the ONS “Price Index of Private Rents (PIPR)” which measures both new and existing tenancies.

DATA: ONS reported Stamp Duty Land Tax receipts fell slightly in Feb 2024

The data covers both commercial and residential property and shows receipts were 6.8% lower in February when compared to the same month last year.

DATA: DWP published Households Below Average Incomes stats

They report “there was a decrease in real terms median household income between FYE 2022 and FYE 2023. The decrease was 0.5% before housing costs (BHC) and 1.5% after housing costs (AHC)” and “Compared to the overall population, children are more likely to live in low-income households”.

DATA: DLUHC published Council Tax levels in England, 2024/25

They report “The average Band D council tax set by local authorities in England for 2024-25 will be £2,171, which is an increase of £106 or 5.1% on the 2023-24 figure of £2,065”.

DATA: DLUHC published EWS1 data on mortgage valuations for flats

The latest release shows “46% of mortgage valuations for flats in buildings 7 storeys and above required an EWS1 form or equivalent during the October 2023 to December 2023 quarter, a decrease from 48% in the July 2023 to September 2023 quarter”.

POLICY: BoE MPC voted 8-1 to maintain Bank Rate at 5.25%

REPORT: BoE published Agents’ summary of business conditions

The report for Q1 2024 notes that “The sentiment of our estate agency contacts continues to improve, as there’s a growing sense that house prices have bottomed out and are now expected to stay flat or grow modestly over the next few months. Contacts report that the reduction in mortgage rates is supporting demand” and “In the rental market, demand remains strong and stock limited, pushing rental prices up although some contacts tell us that the rate of increase is moderating. A few landlords and housing associations are reporting moderate increases in arrears”.

REPORT: CIH published UK Housing Review 2024

The full report is only available to members or to buy, but the executive summary covers a number of topics including housing need, ethnic inequalities in housing, migration and housing, and the long view on housing benefits, policy, and social security.

REPORT: JRF reported on bringing private homes into social ownership

They report the acquisition of private homes can “reduce the cost of providing TA by replacing expensive nightly landlords who have emerged in response to the higher returns they can get” and “challenge an extractive model of landlordism in lower-cost rental markets in which poor conditions and poor management are rife, and where rental payments are not benefiting local communities, by growing a community rental sector”.

REPORT: SMF reported on financial policies to increase homeownership

They suggest “Allow insurers to provide mortgage insurance for high loan-to-value mortgages as an alternative path to homeownership”, “Allow lenders to offer fixed rates for entire 30 year terms as well as 15 and 10 year terms by altering affordability requirements”, and reform of property taxes to make them more equitable. Last week they reported on housing crises in the English-speaking world (we missed it at the time).

REPORT(PDF): Hometrack reported on the UK rental market in Q1 2024

They report “UK rental inflation slows to +7.8%, a 2-year low” and “Rental demand down 20% year-on-year as one-off pandemic factors ease and the labour market cools”.

REPORT: Centre for Cities reported on London’s population since Covid

They report “London’s population fell during Covid by 75,000, the equivalent of the population of Tunbridge Wells” but the “population bounced back quickly after pandemic restrictions ended and is now almost certainly higher than it has ever been”.

REPORT: Lichfields reported on the delivery of large-scale housing sites

The third edition of the report on the speed of delivery finds “Tough market conditions mean a likely slowing in build-out rates and house building overall” and “Demand is a key driver of build-out rates” while “Variety (of housing type and tenure) is the spice of life”.

REPORT: NAO reported on progress to decarbonise home heating

They report “it has become increasingly clear since the 2021 Heat and Buildings Strategy that the government’s approach will centre on heat pumps as the main technology. But DESNZ’s progress with encouraging households to install heat pumps has been slower than planned because costs remain high and public awareness remains low”.

REPORT: BoE published staff working paper on prudential regulation

They report on the impact of prudential regulations on the housing market using an agent-based model. Their conclusions include “when the LTI cap is in place, house prices decrease sharply relative to income, with a small increase in mortgage approvals to owner-occupiers and a significant increase in mortgage approvals to BTL investors”.

REPORT: Knight Frank reported on housing for seniors

The report “analyses and grades local plans for all local authorities in England based on their approach to housing for seniors”. They find “only 23% of local planning authorities (75) have clear policies in place indicating details of their required number of seniors housing dwellings and care home beds” and there has been no progress in the last two years.

REPORT: Savills reported on what LHA claimants can afford

Their “analysis of over one million Zoopla asking rents in 2023 demonstrates that across Britain only 8.5% of new listings would have been affordable using the new LHA rates”.

CORPORATE: Crest Nicholson published Trading Update

They report they “achieved reservations in line with expectations and delivered a year-to-date open market SPOW rate of 0.44, based on 46 outlets, with reduced activity before Christmas and a stronger performance from mid-January.  The SPOW rate for the last eight weeks to 15 March 2024 improved to 0.52”.

CORPORATE: PRS REIT published Interim Results

They report “occupancy at 97% (or 98% including homes reserved for applicants who had passed referencing and paid deposits)”, “rent collection at 99%”, and “like-for-like rental growth for the year to 31 December 2023 was 11.1% (31 December 2022: 5.7%) – with renewals up by c.9% and re-lets to new tenants up by c.16%”.

Chart of the Week

This week ONS launched their new joint “Private rent and house prices” release covering the new rental index. They also took the opportunity to revise the historic house price data. Normally the house price index is only revised within a 12-month window but the problems with the Land Reg Lag since the pandemic means that sales have been taking longer to be registered. Therefore, they have taken the welcome step of revising the data since January 2021. The index had already been subject to larger than usual revisions in recent years, with the tendency to revise downwards in subsequent months (blue lines in chart below). However, this longer term revision has led to an even larger downwards revision of the UK index since January 2021.

The revision is welcome, but it appears there have been some unfortunate side effects. While preparing our latest local market reports, we noticed that there is now an issue with the cash and mortgage sales counts since January 2021. We have notified HMLR and they are looking into it but we have held back on updating our reports until the issue is fixed.

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