Weekly Summary: 5th February 2021

DATA: Halifax report annual house price rise of 5.4% in Jan 2021

This was slightly lower than the 6% reported in December.

DATA: Nationwide report annual house price rise of 6.4% in Jan 2021

This was slightly lower than last month (7.3%) and see Chart of the Week for more info.

DATA: BoE report high number of mortgage approval for house purchase

Though December’s number were slightly lower than last month, they were still 54% higher than the same month last year. Approvals for purchase remain 30% lower than last year.

DATA: BoE data show a slight fall in high LTV mortgage rates

Despite the fall in rates, they are still much higher then before the pandemic.

DATA: HMRC data shows faster recovery in transactions above £500k

Data on the number of transactions by SDLT band show that, while they are a much smaller proportion of total numbers, higher priced properties have seen a stronger recovery in transaction numbers than those under £500,000.

POLICY: MHCLG publish draft national design code

They suggest “Local communities will be at the heart of plans to make sure that new developments in their area are beautiful and well-designed.”

POLICY: Scottish government ends Help to Buy

The decision, along with a cut of their Affordable Housing Supply Programme, is blamed on national budget cuts.

REPORT: Bank of England release latest Monetary Policy Report

They report: “The outlook for the economy remains unusually uncertain. It depends on the evolution of the pandemic, measures taken to protect public health, and how households, businesses and financial markets respond to these developments.”.

Chart of the Week

House price indices reported very high price growth towards the end of 2020 but more recent releases have suggested slightly slower rates of growth in 2021. While this may partly reflect the dynamics of the housing market as it approaches the end of the SDLT holiday, there is another contributing factor: what was happening to prices last year.

The Rightmove index is an extreme example of this with annual growth falling from 6.6% in Dec 2020 to 3.3% in Jan 2021. The chart below shows actual Rightmove prices compared to what they were 12 months ago. The annual change is represented by the gap between the two. The reported fall in annual growth is due to the gap getting smaller but it is clear this was mostly due to a large monthly rise in prices 12 months ago and only a small monthly fall in Jan 2021. Therefore, the fall in Rightmove’s annual growth from 6.6% to 3.3% is mostly due to what happened in Jan 2020 rather than Jan 2021. This statistical issue could be an important one to keep track thanks to last year’s volatile housing market.