MARKET MOVEMENTS

• 10.6% UK house price growth year to August 2021, up from 8.5% in July
  (ONS)
• 160,950 Transactions in September 68% increase year-on-year (HMRC)
• 74,453 Mortgage approvals in August 2021 10.5% increase on five year August average (Bank of England)
• 955,720 Transactions year to date up 39% on 2019 (HMRC)

DEVELOPMENT/NEW BUILD

• Michael Gove has been appointed Secretary of State for Housing, Communities and Local Government following a cabinet reshuffle. His new remit will include taking on "cross-Government responsibility for levelling up" as while as retaining responsibility for the Union and elections.
• During the first three months of 2021 over 37,000 private new homes were started and over 36,000 completed. The figures, released by the Ministry of Housing, Communities and Local Government represent the strongest start to a year for private new build activity since 2007.
• Media reports suggest the government is planning to give Councils the power to veto new homes being sold as second homes and holiday properties. Planning consent may well be required before properties are used as holiday lets and developers may be obliged to provide more starter homes on any new developments.

PRICES

• Rightmove report the price of property coming to market in October has risen across all regions and all markets of the UK, the first time a 'full house' of price rises has been seen since March 2007. The price of a property rose by £3,983, the largest October rise since 2015.
• The rate of annual price growth across the UK slowed in July in all regions except Scotland. Month-on month across the UK the average price of a property fell by by 3.7%. At £255,535 the average price of a property is 8% higher than a year ago (UKHPI).
• A net balance of agents (+68) sense prices will rise over the next 12 months according to the September sentiment survey released by the Royal Institute of Chartered Surveyors. New instructions continue to decline while demand is stabilising.

ECONOMY

• The UK economy grew by 0.1% in July, its sixth consecutive month of growth although growth slowed significantly from the 1% recorded in June. Output in the service sector remained broadly unchanged, the construction sector contracting by 1.6%.
• The number of job vacancies in the UK has hit a record high. Vacancies hit 1.1 million between July and September., the highest figure the ONS have ever reported since records began in 2001. The UK unemployment rate has fallen for the 8th consecutive month and is estimated to be 4.5% compared with a rate of 4% prior to the pandemic.
• Rising food, transport and energy prices have led many to predict that an interest rate rise is likely, far sooner than the anticipated summer of 2022. The next meeting of the Bank's Monetary Policy Committee is on November 4th.

DEMAND

• Although mortgage approvals in August were 15% lower than a year ago, at 74,453 they were 10.5% higher than the longer term (2015-2019) August average. At £21.5 billion, gross mortgage lending in August was 11% higher year-on-year (Bank of England).
• Buyer demand is stabilising according to the September RICS sentiment survey. At a national level the new buyer enquiry indicator posted a net balance of zero in September, a sign of stable demand.
• The Dataloft Demand index indicates buyer demand is still higher than a year ago, but that demand levels have softened in recent weeks. A shortage of available properties to buy continues to impact the market.

TRANSACTIONS

• Over 1 million property transactions have taken place across the UK in the first eight months of 2021, higher than the number of sales during the entire year last year. The HMRC estimate 98,300 sales took place in August as the final SDLT reduction draws to an end.
• Rightmove report sales agreed in September were 15.2% higher than in September 2019 'normal market conditions', with 87% of offers accepted from 'proceedable' buyers, those with nothing to sell, have already sold subject to contract or cash buyers.
• There was a decline in the net balance of agents reporting an increase in newly agreed sales for the third consecutive month according to the latest edition of the RICS survey. With demand stabilising, the shortage of stock will however continue to underpin prices during the final quarter of 2021.

INVESTMENT/LETTINGS

• Rental values are rising at their strongest pace in three years. Average values across the UK, excluding London, rose by 2.0% in the year to August (ONS). Rental values across the capital continue to buck the trend, 0.4% lower year-on -year.
• At +66% the new balance of respondents noting a rise in renter demand across England and Wales is at its highest level ever recorded by the RICS monthly survey.
• As with demand the net balance of agents in the RICS survey envisaging rental growth over the next 12 months is at its highest ever recorded level.. The net balance of agents predicting a rise was higher in all regions except the North and Scotland.

PRIME MARKETS

• Over 2.5% of all property sales over the past year have been priced £1 million or above according to data from the Land Registry. Price growth in prime rural and coastal areas has outpaced that of the capital over the past year, but latest data suggests the prime market here has now bottomed out.
• LonRes report new instructions to the market across prime central, prime London and prime fringe areas were up 6% in July on the five-year (2015-2019) average, while the number of properties placed under offer was down just 1%.
• Compared to a supply shortage across much of the UK, the number of available properties to purchase across Prime London was 20% higher year-on-year in June. With markets well supplied, there is little scope for price growth, many prime areas awaiting the return of overseas buyers to bolster demand.

YOUR NEW HOMES TEAM