Weekly Summary: 29th October 2021

DATA: Zoopla reported UK house prices rose 6.6% in year to September

They reported house prices are rising fastest in Liverpool (10.4%) and Manchester (8.7%), and are forecasting house prices to rise 3% in 2022 and 1.2 million transactions.

DATA: Bank of England reported mortgage approvals fell 2% in September

The number of mortgage approvals for house purchase continued to slowly fall in September, though were still 10% higher than the pre-pandemic average.

DATA: DLUHC reported a 4% fall in new build EPCs issued in Q3

New build Energy Performance Certificates (EPCs) are a useful leading indicator for net housing additions. The small fall reduced the annual total for England to 247,000 (prev. 252,000). This was driven by a 9.4% fall in the supply of new houses while flats rose 4.1%.

DATA: DLUHC released Statutory Homelessness statistics for Q2

Though the numbers are still smaller than prior to the pandemic, there was “a 105.0% increase in threatened homelessness due to service of a Section 21 notice to end an Assured Shorthold Tenancy” as the period covers the removal of most private rental eviction restrictions. The next release should provide more clarity on this trend.

DATA: ONS published Employee earnings in the UK: 2021

The release, using data from the Annual Survey for Hours and Earnings (ASHE), provides a useful summary of employee earnings although it has been affected by the pandemic. The data is regularly used to calculate local authority level housing affordability measures.

POLICY: HM Treasury announced Budget and Spending Review

The budget was relatively underwhelming from a housing perspective, especially given the preceding press briefings. There was the usual scramble to figure out how the Chancellor had reached the “nearly £24 billion” headline and how much was new commitments (not much). It also confirmed the Residential Property Developer Tax rate of 4%.

REPORT: OBR published Economic and fiscal outlook – October 2021

The report updates their forecasts for the economy and public finances. We have explored their forecasts in our latest Housing Market Commentary.

REPORT: GLA published Housing in London 2021 report

The report provides a wealth of information on the state of housing in London and, best of all, most of the data it contains is also available to download from the London Datastore.

REPORT: Housing Ombudsman report on damp and mould

They say “social landlords should adopt a zero-tolerance approach to damp and mould”.

REPORT: Savills published Residential Development Land – Q3 2021

They report the “Strongest growth in greenfield land in ten years” with a “Shortage of all sizes of sites”.  The capital is the one outlier with residential land values falling over the last year in both central and outer London.

Chart of the Week

With rising inflation, attention has inevitably turned to the future path of interest rates and many are now expecting them to rise in coming months and years. In terms of actual mortgage rates in the market, today’s data from the Bank of England shows the continued fall in the average mortgage rate on outstanding mortgages as the rates available on new lending are, on average, lower. Next year could see this trend reverse, with new mortgages threatening to become more expensive than those on existing deals. A longer period of rising mortgage rates would be a new experience for many mortgaged homeowners and the impact on household finances is far from clear. Much would depend on both the scale and speed of any increases relative to household income growth. It looks like one of the major drivers of housing market trends over the last thirty years may be about to reverse.