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  • Writer's pictureConrad Binding

UK Property Market Update


Economy

  • Bank of England base rates were raised to 5.25% in August, the 14th increase in a row, to curb inflation. The Bank expects inflation to slow to 5% by the end of the year.

  • The UK economy grew by 0.5% in June, following a GDP fall of 0.1% in May and a growth of 0.2% in April, taking the overall growth to 0.2% for Q2.

  • Inflation fell to 6.8% in July, down 7.9% from June, its lowest since February 2022. Core inflation remained unchanged at 6.9% (ONS).



Prices

  • The average price for a property in June was £28,7546, up 1.7% year-on-year and 0.7% on the previous month (ONS).

  • Rightmove reported a drop of 0.2% in average asking prices in the last month to £371,907, just below the 0% change typically seen in July.

  • 6.5% of homes for sale are seeing >5% cuts to asking prices, 60% above the 5-year average (Zoopla/Hometrack).


Transactions

  • The HMRC reported that over 85,000 sales took place in June. This is up 6% on the previous month and the highest number since March, although down 15.4% year-on-year.

  • In the latest RICS survey, a net balance of -44% of respondents noted a decline agreed sales during July. This is a drop from a figure of -36% previously and represents the weakest reading for the measure since the start of the pandemic.

  • The Government has established a Mortgage Charter due to continued mortgage rate volatility. The Charter supports 85% of the industry and aims to support mortgaged homeowners. The support does not extend to the buy-to-let investment market.


Demand

  • While the number of mortgages approved in June was almost 7% higher than in May, the level of lending is considerably lower than a year ago, according to the latest data from the Bank of England. So far this year, 27% fewer loans have been approved than last year.

  • 74% of buyers canvassed in June were confident they’d purchase a property within the next three months, a slight uptick on May’s 73%. In the same timeframe, 64% of sellers were confident they would find a buyer (OnTheMarket).

  • The new buyer enquiries series in the latest RICS Residential Market Survey posted a net balance of -45% in July, similar to last month’s figure of -46%.


Investment/lettings

  • At 5.3% in July, annual growth in rental prices in the UK is at its strongest since records began. The Index of Private Rented Housing Prices reports on new lets and renewals.

  • A monthly rise of 1.1% took the average rent in the UK on newly agreed rental contracts to £1,243 in July, a 10.3% year-on-year increase (Homelet).

  • 75% of mortgaged buy-to-let properties have a Loan-to-Value of less than 60%, one in three less than 50%, according to research by Savills. Current profits have moved to negative territory only if landlords were leveraged at 80% or more.


Development/new build

  • Just under 250,000 new homes were built in the year to the end of Q2 2023. This represents a 4% rise quarter on quarter. However, year-on-year completions fell 2.3% (MHCLG).

  • There was £1.9bn of investment into the UK’s Build-to-Rent sector in the first half of the year, down 21% from £2.4bn in the same period in 2022 (CBRE).

  • Prime Minister Rishi Sunak said the government would meet its pledge to build 1 million new homes in this Parliament. Over 2.2 million new homes have been made since 2010, with millions moving into home ownership.


Prime markets

  • 38% of prime London property listings have had a reduction in their asking prices in Q2, down from 45% in the previous quarter (Coutts).

  • PCL transaction volumes were down 26.1% in July compared to the same month last year and 9.1% lower than the pre-pandemic July average (Londres).

  • Buyer demand in PCL has risen through Q2 for top-end homes by 2.5% on the previous quarter in the £2mn-£10mn price bracket and by 1.9% in the £10mn+ market (Rightmove).


Value of sales, Wales - £1,343,721,963

over the past three full months


Average sales price - Wales - £189,562

over the past three full months


The volume of sales - Wales - 6,097

over the past three full months



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