Weekly Summary: 6th August 2021

DATA: Halifax reported annual house price growth of 7.6% in July

They reported a monthly increase of 0.4% though the annual growth rate fell from 8.7% the previous month. This reflects changes in house prices as the market reopened last year.

DATA: Nationwide reported annual house price growth of 10.5% in July

This was lower than the 13.4% reported last month which partly reflects the market re-opening last year. Prices are up around 6% in the year to July and prices don’t usually grow by much more. However, the market is not following normal seasonal trends at present.

DATA: Zoopla reported annual house price growth of 5.4% in June

The lower growth rate compared to other indices possibly reflects the stock weighted Zoopla index while others are sales weighted. Only time will tell which is more accurate.

DATA: HMRC reported a record high 200,000 transactions in June

The provisional data is the highest monthly count since the series started in 2005 as buyers rushed to complete before the nil rate SDLT threshold fell from £500k to £250k. This was double the level of transactions regularly seen in the years prior to the pandemic but fairly average when compared to transaction levels in the decades prior to the financial crisis.

DATA: BoE reported 81,000 mortgage approvals for house purchase in June

This was 6.5% lower than the previous month but still 23% higher than the 2014-19 average. This suggests that housing transactions could continue at higher levels following the end of the stamp duty holiday in September.

DATA: BoE reported a record high £44bn in gross mortgage lending in June

This reflected the very high level of transactions and was matched by a record £18bn increase in net mortgage lending.

DATA: BoE reported further falls in average quoted mortgage rates

The data for July shows record lows for two year fixed rate mortgages at 60% and 75% LTVs and, while rates on higher LTVs are falling fast, they’re still higher than pre-pandemic.

DATA: HMRC released Q2 2021 data on Stamp Duty Land Tax receipts

See our Chart of the Week for more on the trends this data highlights.

DATA: MHCLG reported 251,000 new build EPCs in year to Q2 2021

The quarterly Energy Performance Certificate data confirmed the trend already visible in the weekly data: new housing supply has recovered back to pre-pandemic levels.

REPORT: BoE released August Monetary Policy Report

They revised up their inflation forecast to 4% for the end of the year. They also note that alongside the stamp duty holiday, “Factors such as a desire for more space and an increase in household savings, and the continued low interest rate environment, are likely to help explain why housing markets have also been strong in some other advanced economies as well as the UK”.

REPORT(pdf): Kerslake Commission on Homelessness & Rough Sleeping

The interim report examines the lessons from the “public health emergency response to rough sleeping, and to understand how the significant progress made can be embedded in the long term”. It suggests “the Government should adopt Everyone In as the shared ambition for the future and continue to treat rough sleeping as a public health priority”.

REPORT(pdf): Centre for Homelessness Impact report on “Women, Homelessness and violence: what works?”

The report identifies that “There is a strong link between violence and homelessness amongst women, making the Covid-related increase in violence even more concerning” and suggests that “the policy and practice response to women experiencing homelessness falls short in meeting this challenge comprehensively”.

REPORT: Nationwide & Ipsos MORI on Future of Home

The report marks Nationwide’s “creation of four action groups that will look to establish ways of building more suitable homes for all, from the greening of existing properties and improving rental standards to enhancing the speed and process of construction”.

Chart of the Week

This week HMRC released their latest quarterly stamp duty statistics covering Q2 2021. It provides useful breakdowns on the stamp duty liability of the 366,000 transactions that occurred during the quarter across England and Northern Ireland. Unsurprisingly, the single biggest group was those not liable to pay any stamp duty, accounting for 63% of transactions. It is primarily this group that have helped drive the large number of residential transactions in recent months. However, the housing boom is not limited to just those paying no stamp duty. Buyers of homes over £500,000 have also seen a big increase in numbers, similar in trend to those not paying the tax. But they are much smaller in absolute numbers, only accounting for 12% of buyers. Perhaps the most interesting group is those paying the 3% higher rate on additional dwellings (HRAD). Until now, they had only recovered back to pre-pandemic levels but Q2 saw a big increase as investors and second buyers took advantage of the tax savings. It is also possible that this group includes some home movers who will claim back their HRAD payment when they sell their existing home. The data release also provided information on the number of non resident SDLT transactions (2,700) and suggests an average property price of around £350,000.