Economy
The Bank of England has delivered its first interest rate cut in more than four years, taking the rate to 5%.
Monthly GDP is estimated to have shown no growth in June 2024, following growth of 0.4% in May 2024 (ONS).
CPI inflation rose by 2.2% in the 12 months to July 2024, up from 2.0% in June 2024 (ONS).
House prices
The average price for a property in June was £287,924, up 2.7% year-on-year (ONS).
1 in 5 homes listed for sale in August had an asking price reduction of 5% or more (Zoopla).
1.4% house price change is now predicted through 2024, up from 0.3% in July and -2.2% this time last year (HM Treasury Average of Independent Forecasts).
Transactions
There were 90,630 transactions in July, a 5% rise compared to a year earlier (HMRC).
The agreed sales metric in the latest RICS' survey posted a net balance of -2% this month, a slight improvement compared to the more downbeat readings of -13% and -6% posted in May and June respectively.
The number of sales being agreed is 23% higher than a year ago (Zoopla).
Demand
There were 61,985 mortgage approvals in July which is 26% higher than a year ago (Bank of England).
The reading of new buyer enquiries in the latest RICS Residential Market Survey was +2%, up from -6% last time.
The number of new sellers coming to market is 5% above last year as market confidence grows (Rightmove).
Investment/lettings
Letting agents are receiving 17 enquiries for every rental property, over double the 8 this time in 2019 (Rightmove).
The average UK rent rose by 0.7% in July to £1,308, 5.2% higher than the same time last year (HomeLet).
The average void period shortened from 17 days in June to just 11 days in July - a reduction of 35% (Goodlord).
Development
Just under 240,000 new homes were built in the year to the end of Q2 2024 . This represents a -1.8% fall quarter on quarter and a drop of -4.9% compared to the same quarter last year (MHCLG).
The headline construction PMI in July grew at its strongest rate in over two years, amid optimism surrounding Labour’s proposed reforms to planning laws (S&P).
Build to Rent completions are now running at over two and a half times the average for the period 2017-19 (BPF).
Prime markets
There were 8.7% more transactions in PCL in July 2024 than in July 2023 (Lonres).
There were 11.1% more properties on the market across PCL at the end of July than a year earlier (Lonres).
33% of purchases were made with cash in the year to April 2024, down from 35% a year earlier (UK HPI).
Barry sales overview
Over the last 12 months the average sales price in Barry was £211,110. The total value of sales was £106,396,617.
15% of sales in the past 12 months were flats, achieving an average sales price of £138,277. Houses achieved an average price of £226,937.
The highest value recorded by the Land Registry over the past 12 months was £380,000 for a flat and £685,000 for a house.
Barry lettings overview
Over the last 12 months, the average rent achieved for homes let in Barry was £851 per month. This is a +7% change on the previous 12 month period.
55% of homes let in the past 12 months were flats, achieving an average rental value of £754 per month. Houses achieved an average rent of £1,028 per month.
25% of renters are aged between 25 and 29.
A class act
The government announced plans to impose VAT on private school fees to fund improvements in public education.
The current exemption from value-added tax (VAT) will be removed to fund 6,500 new teachers in England. VAT at the standard rate of 20% will be added to private school fees starting 1 January 2025.
In a poll of agents, 24% report noticing an increase in demand for homes close to outstanding rated schools, directly associated with the announcement.
Just 15% of schools are judged to be Ofsted Outstanding, but 90% achieved the rating: Good or Outstanding, up from 68% in 2010 – suggesting that standards are continuing to improve. (Department for Education). Source: Dataloft by PriceHubble poll of subscribers. Poll 24th July 2024
The path to growth
The government has committed to economic growth as its top political priority and it has placed housing delivery at the heart of its growth strategy.
Economic growth is hard to achieve without significant population growth, particularly in the working age population, so new figures released by the ONS are encouraging.
The population of England and Wales increased by nearly 610,000 people over the past year, to a total of 60.9 million. That is the most significant growth in 75 years and boosts the working age population (aged 20 to 65) at a time when other European nations are experiencing a decline.
The UK population is projected to reach 77 million by 2046 and that will intensify the need for housing to cater for the growing number of people. Building new homes is the key to solving the nation's housing crisis and expected to drive economic growth too. Source: Dataloft by PriceHubble, ONS, Centre for Cities
Mortgage rates fall
Mortgage rates are now at their lowest level since March 2024. Average two- and five-year fixed rate deals fell monthly by 0.18% and 0.15% respectively, ending five consecutive months of rises.
According to Moneyfacts, the average two- and five-year fixed rates fell between July and August, to 5.77% and 5.38% respectively.
Mortgage rates are widely expected to decline further in the coming weeks, especially after the 0.25% base rate cut, the first in over four years.
Markets are pricing in a further cut in 2024, currently forecast to reach 4.67% by the end of 2024. Source: #Dataloft by #PriceHubble, Moneyfacts, HM Treasury Average of Independent Forecasts
Second homes
Households in England own 4.3 million second homes, according to the 2022/23 English Housing Survey, up from 3.3 million a year earlier. Second properties can be owned or rented.
The greatest increase has been in those rented out which form the majority of second homes (73%).
There have been slight reductions in those used by student children or waiting to be sold or moved into shortly.
The remainder, 22% are exclusive second homes. Although forming a smaller percentage than a year earlier, this still represents an increase of 150,000 homes, 114,000 of which are within the UK. Source: Dataloft by PriceHubble, English Housing Survey, data for 2022–2023
Interest rates: Bank of England cuts rates to 5%
The long-awaited cut in the Bank of England base rate finally materialised on August 1st, signalling the Bank's confidence that inflationary pressures are slowly coming under control.
This first cut since 2020 reduces the rate by a quarter of a percentage point and will be welcome news to homeowners with variable mortgage rates – or those considering a move.
The Monetary Policy Committee voted by 5 votes to 4 to cut rates and the Governor made clear that he wants to proceed with caution saying 'we need to make sure inflation stays low and be careful not to cut 'too quickly or by too much'.
Commentators now expect one or possibly two more cuts before the end of 2024. This will also be a welcome boost for housebuilders who rely on borrowing to finance new developments – and their role is critical role if the government is to meet its ambitious housebuilding target. Source: Bank of England, Dataloft by PriceHubble. July 2024
Market outlook: rents
Rental growth has been high in recent years, but the pace is now slowing. Leading indicators are starting to show slowdown in tenant demand and an improvement in supply.
UK annual rental growth is currently at 5.2%, however this has almost halved from 10.3% in July 2023.
Affordability is increasingly critical. Renters paid an average 32.7% of their income on rent in July, slightly weakened in all but two UK regions over the last year.
Rental growth expected to ease back in 2024, broadly in line with earnings growth forecasts and is forecast to moderate to 2.5% by 2028. Source: Dataloft by PriceHubble, HomeLet July 2024, HM Treasury, Nationwide, CBRE, Savills, Knight Frank, Rightmove, JLL Chestertons, Zoopla. August 2024
Market recovery continues
After starting the year with a moderation of -1.7%, annual house price growth has recovered to 2.7% in June, bringing the average price of a property to £287,927.
This is the first month since April 2023 that all UK regions are recording positive annual price growth. Northern Ireland is experiencing the strongest growth at 6.4%, followed by Yorkshire and the Humber (4.7%) and Scotland (4.3%).
Confidence should continue to return to the housing market across the coming months, as inflation remains under control and interest rates are now taking their first steps downwards. Source: Dataloft by PriceHubble, ONS, UK HPI. June 2024
New EPC minimum standards
With the confirmation of Labour’s plans to require all rented properties in England to have a minimum EPC rating of C by 2030, we look at what this means for the rental sector.
In the last 12 months, just 56% of property rentals were in homes meeting the requirement. A third of lets were in homes with a D rating, while 10% were E or below.
At a regional level, there were a higher proportion of homes rented in the North West, Scotland (where different rules apply) and Greater London which achieved the higher ratings but a significant number will still need to be improved.
Some improvements have been made. Back in 2019, less than half of rented homes (49.8%) met the standard. Still, large scale investment will be required. Reapit estimate the cost of retrofitting all PRS properties in England, Wales and Scotland to a C rating is over £24 billion. Source: Dataloft Rental Market Analytics by PriceHubble, MHCLG. August 2024
1 in 10 home buyers rely on help from family and friends
High mortgage rates and rising prices have led more buyers to seek alternative financial support to enter the market or move up the housing ladder.
The latest Survey of English Housing shows that in 2022/23, 1 in 10 homeowners relied on financial help from friends and family to buy their home, an increase from 1 in 15 homeowners a decade ago.
The use of personal savings as a financing method has significantly increased, with nearly half of all buyers relying on savings, up from 39% ten years ago. Source: Dataloft by PriceHubble, English Housing Survey, showing all owner occupiers who bought their own home, respondents could cite more than one source.
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