This week, Savills and Halifax ruffled a few house price feathers, whilst RICS Residential Survey captured the mood. High interest rates continue to impact new and current homes. Construction output tumbling and mortgage arrears ticking up. Welcome to another UK Property News Recap.
Construction Output Data S&P Global
According to S&P Global PMI, for the 11th successive month, house building activity decreased in October 2023. Until market confidence returns and rates about turn, high interest rates will continue to hold back building and investment.
The knock-on effect of softer demand has resulted in purchasing prices decreasing at the fastest pace for over 14 years as lower timber, steel and transportation costs are passed on by vendors.
Halifax House Price Index October 2023
This week Halifax released its October 2023 house price index which, like Nationwide the week before, upset a great many by recording a monthly uptake in property prices.
The autumn bounce after a sticky summer saw average house prices increase 1.1% in October 2023 making the average property worth £281,974. Annually though all UK nations & regions were on average down -3.2. The South East continues to be hit the hardest, with prices falling on average -6% whilst Scotland, displays resilience, with prices only down -0.2%.
The King’s Speech
On Tuesday, the Government’s UK Housing To Do List was delivered by the King. For those who missed it, having nodded off during his monotone delivery, here are the three takeaways on housing.
“Renters will benefit from stronger security of tenure and better value, while landlords will benefit from reforms to provide certainty that they can regain their properties when needed.
“My Government will deliver a long-term plan to regenerate towns and put local people in control of their future.
“My ministers will bring forward a Bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackling the exploitation of millions of homeowners through punitive service charges.
Expect this overdue “Bill” to be scrutinised for the finer details
Savills UK Property Forecast
Estate Agency, Savills, ruffled a few feathers with their mid-week UK Property forecast for the coming years. Many dispute their optimistic outlook whilst others cross their fingers, hoping they are proved right.
They predict house prices will fall 7% by the close of 2023 with a further 3% to come off in 2024, leaving the average house price at £246,950.
This will then steadily increase to £300,108 between 2025-2028. Resulting in overall prices increasing 17.9% during the next 5 years.
The RICS Residential Survey October 2023
On Thursday, there was more UK property projections this time from RICS October 2023 Residential Survey.
After a long summer retreat, the autumn market shows marginal improvement in agreed sales & demand though this is expected to head back down the winter slopes.
New instructions make themselves scarce in the hope the next year will be more lucrative.
Meanwhile prices remain negative with further falls expected, albeit at a slower pace. The exception being Scotland & Northern Ireland were prices are believed to rise.
In the rental sector, peak season over, demand softened slightly whilst supply continued to reduce. This was most noticeable in London were the cost of renting in the Capital has caused many to flee for the suburbs.
The continued imbalance between supply & demand, is projected to raise rents on average by 4% in 2024. Leaving some to weigh up house prices drops versus another year of rent.
UK Finance – UK Mortgage arrears data October 2023
On Thursday, UK Finance updated us on the number of mortgage arrears. These have ticked up but it’s the buy-to-let market that is hit the hardest with a 33% increase on the previous quarter. Yet the number of homeowner mortgaged properties taken into possession decreased 9% when compared to the previous quarter. Overall the number or homeowners and buy-to-let mortgage accounts in arrears remains low with only 1% and 0.57% respectively left owing.
And that concludes another UK Property News Recap.
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