Weekly Summary: 23rd July 2021

DATA: Rightmove reported UK asking prices rose 5.7% in the year to July

They reported 140,000 more sales agreed and 85,000 fewer new listings in the first half of 2021 than the long-term average. The imbalance was greatest for large homes (4 beds).

DATA: HMRC reported 213,000 residential transactions in June

The non-seasonally adjusted data for the UK was the highest single month since the monthly data was first published in April 2005. The high number of transactions reflects the rush to complete before the nil rate of stamp duty land tax (SDLT) fell from £500,000 to £250,000. While very high for the last decade, this level of transactions was relatively normal in the decades prior to the financial crisis.

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

This was the highest level of receipts reported in the month of June and suggests the rush to beat the tapering of the nil rate stamp duty band included a lot of buyers who were still liable for some payment. This may have included those buying above £500,000 and buyers of additional properties (e.g. investors and second homes).

DATA: MHCLG published the Q1 2021 Statutory Homelessness release

The data for England reported “68,250 households were initially assessed as homeless or threatened with homelessness and owed a statutory homelessness duty” and “the number of households in temporary accommodation was 95,450”, a 3.5% rise on last year.

DATA: MHCLG released right to build register monitoring for 2019/20

Since 2015, local planning authorities in England have to keep a register of people looking for plots for custom and self build homes. The latest data shows 47,714 individuals and groups on the register, an increase of 1,967 from the previous year though there were 9,517 entries during the year. The release also reports that there were 7,731 plots granted planning permission for self and custom build during the year (Oct 2019 to Oct 2020).

POLICY: MHCLG set out their “Vision for building beautiful places”

The “Building Beautiful Places plan” include creating the Office for Place, updated national planning policy framework (NPPF), and publication of the National Model Design Code. This Lichfield blog provides a useful summary of the changes to the NPPF and notes that “These are more changes to the existing system, so more of a policy filler before the main planning reform event”.

POLICY: MHCLG proposes end of EWS1 forms for buildings under 18m

Based on advice from the independent expert group that found “there is no systemic risk of fire in blocks of flats under 18 metres”, the government has set out that EWS1 forms should not be requested for buildings under this height. The press release included some positive words from major lenders and the joint press release from UK Finance and BSA welcomed the move but they also “urge them to continue to work with relevant stakeholders to ensure all documents, including the RICS guidance, align with the views of the expert panel”.

REPORT (PDF): HCLG Committee report on Permitted Development Rights

The report recommends “the Government pause any further extensions of permitted development rights for change of use to residential” and “conduct a review of their role within the wider planning system”. They are particularly concerned about the new class MA right for change of use from class E (the new ‘high street’ use class) to residential.

Chart of the Week

This week also saw the publication of Homes England’s annual report for 2020/21 which includes some interesting information of the financial state of Help to Buy equity loan (page 52). It shows that 70,617 loans had been repaid by the end of 2020/21 which equates to 21.5% of all loans issued. The original cost of these repaid loans was £3.3 billion and the repayments resulted in a net gain to Homes England of £312.5 million due to rises in house prices. This was an average of £4,425 per repaid loan. However, the average receipt per loan is very dependent on its age, as shown by the chart opposite. Homes England’s average net receipt per loan was minimal for loans issued recently but rises to over £10,000 for loans issued in 2013/14. Last year’s release had indicated some losses for loans issued in the previous couple of years but recent house price growth appears to have helped turn average receipts per loan positive.