Weekly Summary: 4th March 2022

DATA: Nationwide reported UK house prices rose 12.6% in year to February

Nationwide report another record high (£260,230) and the highest growth rate in the first two months of a year since 2004.

DATA: Zoopla reported UK house prices rose 7.8% in year to January

They report house prices are rising fastest in Liverpool and Nottingham. Measure of buyer interest are still higher than prior to the pandemic and sales agreed are 26% higher. However, the flow of new supply is just 5% higher than the pre-pandemic average and the stock of homes for sale is 43% lower.

DATA: Bank of England reported a rise in mortgage approvals in January

Although lower than last year’s stamp duty induced highs, the number of mortgage approvals for house purchase has continued to recover from the post tax holiday lows. They were 12% higher than the 2014-19 average. The number of approvals for remortgaging in January 2022 was 42% higher than the same month last year.

POLICY: Government proposed a Register of Overseas Entities

There is a lot of talk about cracking down on and increasing the transparency of foreign buyers of UK property. A register of owners has been in the works for a while and the actual impact will depend on if/when it actually makes it into law and, more importantly, the ability and capacity to actually enforce it.

NEWS: Reports suggest Oxford-Cambridge Arc have been shelved

The FT(£) reports that plans for the project have apparently been flushed down the toilet.

NEWS: MoneyFacts reports rises in average mortgage rates

They also report a small drop in the number of mortgage products available: “For February there were only 5,356 products available on the market compared to January’s 5,392”.

Chart of the Week

Despite the rise in advertised mortgage rates, the latest data on actual mortgage rates from the Bank of England shows that the impact on new lending has been minimal, so far. The average effective rate on new lending secured on dwellings was 1.59% in January, the same rate as the previous month and only slightly higher than the record low of 1.51% in November. While that measure will inevitably rise in coming months as more recently agreed deals reach completion, the two key thresholds we’ll be keeping an eye on are the average rate on new lending two years ago – just before the pandemic hit (1.87%) – and the overall average rate on existing lending (currently 2.01%). Our analysis suggests that house prices are more likely to fall when the rate on new lending crosses these two measures.

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