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UK Property News Recap 09.02.2024

This week, the sales market took two steps forward, the rental market, two steps back. Redrow and Barratt came together, as sellers prepped to attract. Welcome to another UK Property News Recap.


Average UK rents take a step back

HomeLet’s monthly review of average rents for January 2024 revealed that, for the third month in a row, rents reduced.  The largest falls were reported in Northern Ireland & Greater London, however despite the respite, rents are still  7.5% higher than a year ago & 18% higher than 2 years ago. 


Homelet rental index jan 24


As the London sales market slowly picks up, average rents fell by -2.2% in January, which means that since October 2023, rents have fallen by -5.1%. Once again, despite this shift prices remain up +4.6% annually with some boroughs faring better than others; Camden prices down -3.3% while Barking & Dagenham increased 12.2%.


HomeLet rental index jan 24 london


Nationwide joins Santander, increasing mortgage rates 

Following the Bank of England’s decision to hold the base rate at 5.25%, Nationwide’s mortgage sale was curtailed after only 48 hours, last week.  Nationwide, like Santander the week before, opted to increase, not decrease their offerings by 0.3%.

This was largely due to the lender’s ability to manage the influx of applications as opposed to the Bank of England’s decision, which was widely expected. However uncertainty around when the Bank will drop rates remains a contributing factor. Until lenders are confident of delivery, mortgage rate reductions may well have plateaued in the short-term.


Knight Frank Prime Central London January Review

Knight Frank’s PCL January review demonstrated a sales market prepping for the spring. Many sellers and buyers, are stalling in the hope of fair-weather news, be it from the March budget or the Bank of England delivering a base rate cut? This was demonstrated by a 15% increase on December 2023 valuations and a 8% jump in new buyers registrations while actual instructions decreased 16% along with exchanges at 17%. 


S&P Global UK Construction PMI- January 2024

S&P Global UK Construction PMI survey for January 2024 showed that, despite an ongoing decline in output levels & the 6th consecutive monthly decline in new work, expectations are high for a more productive year ahead in the construction industry. The promise of “favourable underlying economic prospects” is boosting morale but causing many to stall until then.


S&P Global construction index


New Mortgage offering from Netherlands Bank, Munt

Netherlands bank, Munt, announced a new mortgage offering called April mortgages. These will disrupt the current status quo by automatically reducing the borrowing rate if the loan is paid down or if the property increases in value. In addition there will be no early repayment charges if someone is moving house or repaying their mortgage. Unlike UK lenders who fund mortgages against savings accounts, Munt’s loans will be funded through investment from pension funds and life and insurance businesses.


Halifax HPI – January 2024

Halifax HPI for January 2024 claimed that for the fourth consecutive month house prices increased –rising +1.3% in January making the average house price now £291,029. Annually Scotland & Wales (+4%) & Northern Ireland (+5.3%) continued to outperform while the South of England (-2.3%) & London (-0.4%) lagged behind.


Halifax house price index
House builder Barratt buys Redrow for £2.5bn

After a tricky 2023 – where high inflation increased build costs and buyers’ ability to spend, squeezing developers revenues & operating margins – the decision by Barratt to acquire Redrow, pulling together resources and land sites, is hardly a surprise.  Both now are more optimistic for the years ahead, their staff however, fearing for their jobs, are less so.  


Barratt Results:

Barratt half year results 2024


Redrow Results:

Redrow half year results 2024


RICS Residential Market Survey January 2024

After a year of “inflated” gloom, optimism appears to be seeping into RICS surveyors’ consciousness. Their January 2024 report showed an increase in buyer demand (+7%) and agreed sales (+5%).


RICS Feb 2024 market survey enquires and instructions


Despite national house prices residing in negative territory, -18%, this reading has edged up over the past 5 months. Looking ahead, surveyors pegged London, Wales, North West, Scotland & Northern Ireland to make the biggest comeback in the next 3 months.


RICS Feb 2024 market survey sale price expectations
Mortgage arrears and possessions figures Q4 2023

UK Finance’s latest mortgage arrears and possessions data for Q4 2023 highlighted how bloated inflation quelled the housing market’s post pandemic boom, scaling back residential transaction volumes by 23% and the buy-to-let market, by 53%. 


Looking ahead, UK Finance predicted a further contraction of 8% and 13% respectively.


UK FInance Property Transactions and Gross Lending Dec 23


Given the market shift, many feared arrears and possessions would dramatically increase. Although the former has increased, possessions actually decreased in Q4 2023. 

When compared against the previous quarter, arrears increased +7% to 93,680 and BTL mortgages arrears +18% to 13,570. Homeowner possessions fell by 14% (540) but BTL mortgaged properties increased by 11% (500).


UK Arrears and possessions Dec 2023


Bellway Half Year Results

On Friday, developer Bellway released its half-year results which reflected a restrained 2023 market. Housing completions fell by 28.1% to 4,092 homes. The overall average selling price reduced by over 2% to £309,300, primarily driven by a lower proportion of private completions, which reduced to 75% of the total (2023 – 79%.) They expect the overall average selling price “in the year ending 31 July 2024 to be around £295,000 (31 July 2023 – £310,306), reflecting a further increase in the proportion of social homes in the second half of the current financial year and a continued use of targeted incentives”


And that concludes another UK property News Recap. Should you have any comments or suggestions, as ever, please get in touch here.