Weekly Summary: 4th December 2020

DATA: Nationwide report annual rise in house prices of 6.5% in November

This is the highest rate since January 2015 and it looks likely that prices will end up rising 7% or more across the whole of 2020 when next month’s data is released.

DATA: Bank of England reported that mortgage approvals for house purchase in October were 51% higher than a year ago

Approvals for house purchase rose 5.9% compared to the previous month, reflecting the boom in sales agreed moving through the buying process. However, approvals for remortgaging were still 35% lower than the same month last year.

DATA: MHCLG’s Affordable Housing Supply data for 2019-20 reported a 0.8% annual increase across England

The result was underwhelming though not surprising given the limited increase in net supply reported last week. See Chart of the Week for more on supply.

POLICY: Consultation on proposed PDR for the changing of Commercial, Business and Service use (Class E) to residential

The proposed change suggests that “where there is a surplus of retail floorspace, quality residential development will help diversify and support the high street”.

REPORT: UK Finance release 2020 Q3 Household Finance Review

This report is a useful summary of the mortgage market and household finances but it doesn’t make up for UK Finance’s decision to stop making headline data freely available.

NEWS: MoneyFacts report an increase in availability of 90% LTV mortgages

Their data for the end of November shows 81 mortgages available at 90% LTV, an increase of 25 since the beginning of the month. However, this is still 698 fewer than were available at the beginning of March. There have been reports of more lenders returning to this part of the market this week so this could be understating the still slow recovery.

NEWS: Zoopla report Luton is the top “hotspot for first-time buyers”

The rankings are based on applicant leads attributed to first-time buyers between August and October. The top twenty list of locations is a mix of London boroughs, and relatively cheaper parts of the south of England and the West Midlands. The incomes and deposits required to buy with a 15% deposit and loan-to-income ratio of 4.5 are considerable.

Chart of the Week

MHCLG’s release of affordable housing supply data for 2019-20 finally allow us to construct our best estimate for housing delivery by tenure across England. The results of this are shown in the chart below. Perhaps the most striking part of the chart is the importance of Help-to-Buy Equity Loan in driving completions higher since it was introduced in 2013. As the end of the scheme in 2023 draws nearer, the big question is how many of these completions would’ve happened without Help-to-Buy. That then leads on to the question of what can replace it. Will it be First Homes, Shared Ownership, or some other scheme.