This week the UK seemed to be treading water; property news and buyers held their breath, waiting for Friday to come around so the relentless soundbites and political point-scoring we’d been subjected to for the past six weeks would end. On Thursday, finally able to have our say, the nation cast their vote and then waited for the sun to rise. Collectively, we knew the outcome but only when it was spoken did we register that “change” was here. Welcome to another UK Property News Recap – 05.07.2024.
Labour set out its housing agenda
On Monday, Labour was keen to set out their housing plans to get spades into the ground from day one. These included:
- A local authority-led review of green belt land to ensure they are hitting housing targets.
- Draft a framework for national planning policy, reimposing targets to ensure councils meet local housing needs.
- Recruit 300 planning officers
- Establish a “first dibs” scheme; prioritising new homes for a certain number of locals to prevent properties from being sold to overseas investors.
Nationwide HPI June 2024
Average house prices tiptoed up according to lender Nationwide increasing by 0.2% month-on-month during June to £266,604, but remaining £7,147 down from their peak in August 2022.
Price growth, however, isn’t consistent across the country: prices increased annually in Northern Ireland by 4.1%, in Northern England by 2.4%,
but down 0.3% in Southern England. Even here growth varies depending on where you are; prices in the Capital increased 1.6% while East Anglia saw falls of 1.8% year-on-year.
Knight Frank Global House Tracker Q1 2024
Global house prices had a growth spurt in Q1 2024, with annual growth across the 56 markets Knight Frank covers reaching 3.6%. Turkey topped the leaderboard, by making a dramatic comeback after a dismal summer in 2023. Bulgaria (16%), Poland (13%), Colombia (12%), Taiwan (10.5%), and Greece (10.4%) followed with double-digit growth while prices fell 11.6% in Hong Kong as their economy struggled to keep pace.
China’s newly built foundations remain shaky
Developers remained on the hook as bailouts and government incentives proved ineffective in boosting property sales in China. New home sales fell 4% in June compared to last year, while existing stock sold at the highest monthly level in the three years. Demonstrating buyers preferred to pay less for existing apartments in town than for new builds in the suburbs.
London Housing Association RHP gets downgraded
Future-proofing existing stock proved costly to housing association RHP. S&P lowered their long-term issuer rating from ‘A’ to ‘A- but said it expects RHP’s rent revenue growth in 2024/25 to outpace cost increases, allowing margins to recover.
Average UK rents increase across the UK
The pace of rental growth may have slowed but it’s not receded. Rightmove found average rents outside London increased 7% annually to a record high of £1,316. To stem the rate of growth Rightmove analysis suggests 12,000 new rental homes need to be built in those under-supplied northern regions.
In London, where rents are highest, prices rose by only 4% due to 15% of tenants looking further afield, for more affordable rents, causing a 16% increase in the number of available properties to rent. Demonstrating how increased supply reduces price growth.
S&P Global UK Construction Purchasing Managers Index – June 2024
After a brief respite in May, construction hit an election setback in June.
Commercial and civil engineering continued to plod along while housing activity fell, with developers taking time out to see what election promises would be fulfilled.
S&P Global UK Construction Purchasing Managers’ Index recorded a fall in activity in the construction industry from 54.7 in May to 52.2 in June 2024.
Despite this, optimism for a better second half of the year remained, with companies recruiting more employees.
Halifax HPI June 2024
According to the lender Halifax, average house prices dropped by -0.2% on the previous month in June 2024 to £288,455 but remained up by +1.6 annually. The market stagnated over the wet summer till the election is over and August’s base rate is called.
Once again, on an annual basis, Northern regions faired best – Northern Ireland topping the growth leaderboard with +4%, followed by England at +3.3%, Wales +2.7% and Scotland at +1.6%.
Eastern England however came in last; down 0.6%.
Propertymark try to make an impression on the new Labour government
Propertymark outlines its wish list to the new Labour Government:
– Look at landlords as small businesses and allow them to claim 100% of their mortgage interest when filing their tax returns
– Explore all viable methods of increasing the delivery of homes in places where people want to live
– Prioritise leasehold reform and cap ground rents
– See more energy-efficient homes, as long as new rules and requirements are realistic
– Regulation of property agents
Shares in Britain’s FTSE 100 housebuilders increase after Labour election win
Housebuilders saw their shares prosper after Labour’s win – with hopes pinned on electioneering promises being realised, bringing in an era of housebuilding.
Barratt Developments up 2.4% by close of trading on Friday
Bellway up 1.5%
Taylor Wimpey up 2.8%
Persimmon up 2.2%
Labour moves in
On Friday the 5th of July, Sunak was evicted and Starmer moved in. Before the new PM even had time to cross the threshold, the property industry was baying for housing reform. Promises of “change” and how quickly it is instigated will be held to account by all those looking to prosper off the back of it. Keir Starmer may have won the election but his legacy depends on his next steps.
And that concludes another UK Property News Recap – 05.07.2024. If you have any comments or suggestions, please get in touch here.
