This week, sellers “hop”ed for sales, first-time buyers bagged a few, Nationwide and Halifax prices melted and general approval increased. Keir Starmer promised a bigger selection, in years to come, to those who couldn’t participate in this year’s property hunt as affordable and buy-to-let homes became unaffordable, hoping to secure votes…. Welcome to another UK property News Recap – 05.04.2024
First-time buyers dominate London sales in 2024
According to estate agent Hamptons, half of all homes sold in the capital so far this year were bought by first-time buyers. Keen to get out of the rental market and capitalise on 2023’s house price falls, those buyers who can still afford to make the move are.
To make the numbers work they are borrowing for longer and choosing smaller properties averaging around £422,660. Should this trend continue there could be 363,000 new homeowners across Great Britain this year, the highest number since at least 2009.
Despite this increase in sales, “first-time buyers will collectively spend £3bn less on their first homes than in 2021 while paying £796m more in mortgage repayments during their first year of ownership due to higher rates.” Buyers are clearly prepared to take short-term pain for long-term gain.
Nationwide HPI for March 2024
Lender Nationwide’s March 2024 House Price Index showed average prices for those borrowing slipped by -0.2% on the previous month. Recent rate reversals and speculation over delayed base rate cuts impacting 2024 initial tepid house price increase stimulus in certain regions.
Keen to point out the market was better than it was a year ago. Nationwide pressed that annually prices had increased 1.6%. This was largely driven by consistent growth in Northern Ireland and the north while the south, still loaded down with affordability issues, pulled the national average down.
Mortgage approvals increased
Dormant 2023 buyers made their New Year resolution to move in 2024. Motivated by the effective interest rate, which dropped to 4.90% in February, mortgage approvals for house purchases rose from 56,100 in January to 60,400 in February. Up until the election, expected this autumn, sales volumes will ebb and flow before accelerating into 2025.
Keir Starmer makes his housing move
Keir Starmer targeted seats in need of housing to make sure he takes up residency in Number 10. Setting his sights on green belt land to increase supply and votes in regions where the need for homes outweighs any nimby concerns.
Buy-to-let arrears increase
Best laid pension pot plans go awry when cheap money becomes costly. According to UK Finance, “At the end of Q4 2023 there were 13,570 buy-to-let mortgages in arrears greater than 2.5% of the outstanding balance. This was 123.9% higher than in the same quarter a year previously.” Possessions also ticked up 56.3% on the same quarter a year previously.
Despite the average gross rental yield increasing to 6.74% in Q4 2023, the appetite to become a landlord, in need of finance, remained unappealing. The value of new buy-to-let lending fell 55.4% in Q4 2023 when compared with the same quarter in 2022.
Affordable housing becomes unaffordable
Affordable housing becomes anything but as high interest rates impact private finance and build costs, reducing much needed supply levels now and in the short to mid-term. Housing associations across England forecast 64,000 fewer homes built over the next 5 years, according to government data.
Rightmove Seller Easter Hunt
Sellers came out of their burrows in time for Easter hoping to attract buyers on the hunt for properties. On Thursday the 28th of March the number of new listings on the property portal Rightmove was the third biggest since August 2020. Optimism remains high especially in cheaper regions where properties remain relatively affordable in comparison to the capital where, despite recent price “amendments,” average prices remain far removed from the national average.
Asking prices were up by 29% since March 2020 in Wales, versus an 8% uplift in London.
March 2024, house price index from Halifax, shows base rate nerves
March 2024 proved sticky for house price lending as prices slipped -1.0% on last month to average £288,430. Uncertainty around base rate timings, causing prices to wobble. Despite this prices, according to lender Halifax, remain +2.0% up on the previous quarter and up +0.3% annually. Northern Ireland topped the annual growth leaderboard, up +4.3%, closely followed by Scotland at+2.1%. Meanwhile southern regions lag behind, stuck in the affordability mud.
Halifax HPI March 2024,
And that concludes another UK property News Recap – 05.04.2024. Should you have any comments or suggestions, as ever, please get in touch here.
