Kate Faulkner's price summary tracks key reports on property prices produced on a monthly basis, and summarises crucial numbers and what experts are saying about the market and includes Kate’s comments on what this means, primarily for the general public, but also for the industry, market and economy. This summary report includes data from the NAEA, Nationwide, Rightmove and the Land Registry.
Kate Faulkner comments on the national market:
Most of the indices are showing 6-7% increases for the end of 2015, bar Halifax which seem to be recording a much higher increase of 9.5% for some reason. Rightmove report good news for first-time buyers saying “there’s more property coming to market” with “asking prices pretty much the same as a month ago” and “prices have hardly increased month-on-month for properties with two bedrooms or fewer”.
And, in a rare good market for both buyers and sellers, the trading up/down market should do well this year as confidence - which is key to property market success - is high. According to The Halifax Housing Market Confidence Tracker “a majority of people believe that average UK property prices will be higher 12 months from now”. The question will be what will happen on 16th March when George Osborne clarifies the 3% Stamp Duty for second home owners and how will this affect the current buoyant market from 1st April?
Kate Faulkner comments on regional differences:
LSL’s index has some super data in it this month which shows there was a total of 900,650 home sales in 2015, a decline of 2.6% from the previous year, but sales in the second half of the year were above the same period in 2014. Usefully, the research delves deeper to show an increase in detached home sales - up 5% year-on-year - in the final quarter of 2015. The reason this data is useful is it provides great commentary at a regional level and good insight into which property types and areas are doing well from a volume of sales perspective as well as price.
The other interesting insight from the reports this month is the commentary on the impact of George Osborne’s attack on landlords. LSL point out that “A recent Sunday Times analysis in conjunction with a major estate agency suggested that from the sales the firm recorded in 2015, only a third of homes sold to investors attracted any kind of offer from someone who wanted the property as a main residence (whether first time buyer or not), and that investor purchases made up around 15% of total sales.” In other words BTL investors are not really competing with ‘normal buyers’ at all. Hometrack broadly agree, with their stats suggesting “8 out of every 10 sale…. still go to owner-occupiers.” So although landlords and investors are being heavily penalised for buying homes, the idea that this is going to somehow make life ‘easier’ for buyers is highly unlikely. The question that needs answering post April is if investor demand is ‘choked off’ in areas with a high demand for rented property, what will happen to rents and prices in these local markets if supply is switched from the PRS to the sales market?
RICS “All parts of the UK reported some price rises, with East Anglia and the South East seeing the firmest price momentum. (Dec 15)”
LSL “Out of the ten regions in England & Wales, the South East has the highest rate of house price inflation at 8.1%. All 25 of the local authority areas in the South East are recording positive movements in their respective prices, topped by Luton at 18.5%, closely followed by Reading at 16.2%. The East Midlands has moved up to second place displacing East Anglia into third position, with growth in prices in the City of Nottingham and the county of Nottinghamshire at 10.6% and 8.8% respectively, assisting its overall rate of 6.7%. Greater London is currently in fourth position at 5.6%. (Dec 15)”
Hometrack “Hometrack’s UK Cities House Price Index has recorded a further jump in the annual rate of house price growth to 11.4%, up from 10.2% the previous month and 8.9% twelve months ago. This represents the highest rate of growth for 15 months. Cambridge continues to perform like London and has registered the highest annual rate of growth at 14.4% followed by London (13.8%) and Bristol (12.8%). All these high growth markets are growing at a broadly similar rate to the levels seen a year ago. Turmoil in global financial markets is raising concerns over the impact on the UK economy and possible knock-on impacts for the housing market. The annual rate of house price in Aberdeen has slowed from +13.5% a year ago to -1.4% today and looks set to remain weak over 2016. Newcastle and Sheffield are recording the next lowest growth rates of 3.7%, still higher than average earnings, and in cities where the housing recovery is at a much earlier stage. (Dec 15)”
Land Registry “The region with the most significant annual price increase is London with a movement of 12.4 per cent. The North East saw the smallest annual price increase of 0.8 per cent. London also experienced the greatest monthly price rise with a movement of 2.1 per cent. Wales saw the most significant monthly price decrease with a fall of 0.8 per cent. (Dec 15)”