Rates continued to dominate the property headlines this week, whether due to their fallout, the lack of consistency, or how they will dictate market activity and prices this year. First-time buyers, unable to wait for the promise of better rates to materialize, are hoping to make up for it by beating the stamp duty deadline. Given that the average sale takes five months, their chances are slim, but not impossible. Fortune favors the brave — cash and chain-free. Welcome to another UK Property News Recap – 10.01.2025.
Belvoir raises an eyebrow over Halifax data
Estate agent Belvoir questioned Halifax’s crude average data which reported annual house price growth of 17.2% in Stoke-on-Trent. The agency collated official data, from the Land Registry, Bank of England and the Office for National Statistics, which suggested the rise locally was closer to 4%.
This should serve as a warning to sellers, over-egging New Year pricing off the back of average HPI data. Get it wrong and it could prove a costly mistake.
Halifax December 2024 HPI
According to Halifax Bank, house prices were put on ice in December 2024, chilling by -0.2%, as a result of buyers hoping for New Year rate adjustments and their focus shifting to alternative online platforms not related to property.
Annually property prices were up 3.3% making the typical property now worth around £297,166. Northern Ireland continued to top the annual growth leaderboard; up 7.4% followed by the North West (5.3%), then Wales (4.6%) and London (3.3%). Surprisingly, Scotland came in last with only 2.4% annual growth.
Stamp duty stampede, or is it?
Not content with the number of column inches this week, Halifax claimed stamp duty changes would motivate first-time buyers into action; it did…in November 2024. Many will now try and some will fail to make the deadline unless the property is chain-free and conveyancing is swift. Post deadline, there is likely to be some renegotiation at exchange and possibly bigger discounts if rates remain at similar levels.
High interest rates bore a hole in Bloor Homes
Bloor Homes reported a 27% drop in pre-tax profit and a £100m fall in turnover to £1.25bn for the year to 30 June, 2024. The developer said the landscape has proved challenging but hopes mortgage stability will boost future business.
The New Year Rate sale got underway
The New Year Rate sale kicked off with little to no fanfare as lenders trimmed back November increases further, vying for buyers attention. HSBC led the charge at the start of the week followed by some smaller lenders and First Direct who cut rates by 0.3% across its mortgage range. A day or so later, bond yields skyrocketed, which could scale back further adjustments this year.
The Chartered Institute of Housing runs the social housing numbers
In response to the government’s consultation regarding social housing rent policy, the Chartered Institute of Housing commissioned an analysis from Savills to examine the effects of various rent-setting options for social housing. The Government’s current proposal permits social landlords to raise rents by CPI plus 1%. Savills’ findings indicate that a decade-long settlement could yield a cumulative total of over £72 billion for social landlords over 30 years, in contrast to the £37 billion projected under the government’s proposed five-year plan.
Landlords banned from asking for more than one month upfront
On Wednesday, Deputy Prime Minister and secretary of state for housing Angela Rayner claimed to be “putting an end to renters being ripped off by outrageous upfront costs that leave them struggling to make ends meet or locked out of housing altogether.”
This meant renters would no longer be required to pay more than a month’s rent upfront. This policy may be great for tenants generally but for those new to the country or self employed or with bad credit…getting a rental just became a lot harder. Landlords, in these scenarios, ask for more upfront costs to protect themselves, not because they are greedy. Taking this away will guarantee that tenants who don’t pass reference checks will be sidelined for those that do.
Housing pipe dreams
Councils and industry professionals have questioned the government’s housing targets, which are based on data provided by an algorithm. These targets are so far-fetched that no one can even hope to achieve them. If boroughs don’t have the sites or willing builders, along with sufficient resources and competitive rates to cover development costs and attract buyers, the government’s housing target of 1.5 million homes will become just another broken election promise.
Transaction volumes fall in November 2024 but are up on 2023 levels
According to HMRC, seasonally adjusted monthly property transactions in the UK increased by 13% compared to November 2023, but were down 8% from October 2024, totalling 92,640 transactions. First-time buyers, eager to complete their purchase before the March 31st deadline, were active in October. However, as interest rates rose, their motivation waned in November 2024.
Government bonds yield nothing but heartache
On Friday, the UK 30-year gilt yield stood at 5.38%, and the 10-year yield was at 4.82%, driven by increased concerns over persistent inflation, government borrowing, and fiscal policy. This was reflected in the swap markets, which rose from just under 4% in mid-September to more than 4.5%.
Any hopes of more favorable rates in 2025 for the 700,000 individuals due to remortgage this year have been shattered, and both investors and residential buyers remain financially squeezed, delaying their ability to move forward.
And that concludes another UK Property News Recap – 03.01.2025. If you have any comments or suggestions, please get in touch.
