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UK Property News Recap - 11.10. 2024

House prices grow, and generations divide. Developers’ profits tumble as construction picks up while cladding works are put on the clock. Welcome to another UK Property News Recap – 11.10.2024.

 

Halifax House Price Index September 2024

 

Coinciding with wage growth and rate trims, UK house prices tiptoed up +0.3% in September 2024 according to Halifax House Price Index for September 2024. 

 

Annually, growth edged up to +4.7% making the average property price £108 short of the record high of £293,507 set in June 2022.

 

The regional picture showed that on an annual basis, house prices increased in:

 

Northern Ireland by 9.7%

Wales by 4.4%

Scotland by 2.1%

North West by 5.1% and

London by 2.6% (the Capital still has some way to go to catch up with the peak price set in August of £552,592 – the current average now at £539,238) 

 

Halifax house price Index September 2024
The generations divide 

 

The era of cheap money, gone, first-time buyers today not only pay more for their homes but have less disposable income or funds to invest.

Hamptons data showed that first-time buyers “born in the late 1990s will be paying on average £1,739 a month in mortgage repayments.

Millennials, born in the 1980s to mid-1990s, around £863 a month, once adjusted for house price inflation.”

 

Grainger reports profit growth

 

UK’s largest residential landlord, Grainger, reported like-for-like rental growth of 6.3% for the year to the end of September. The portfolio which consists of 12,000 homes, 1,113 of which were acquired in this financial year, showed rental growth of new lets across its portfolio stood at 5.6% and renewed lets at 6.8%. 

Despite growth slowing, the return still justifies the investment while many first timers remain priced out of the sales market.   

 

 

Easy access to national lifetime saving pot touted

 

“Schroders and the Pensions Management Institute, have proposed a “national lifetime savings plan” enabling early access to retirement savings for first-time buyers” or to pay off bad debt.

 

Save now for a more secure future or to get out of trouble quick, with no backup plan. 

 

Developer Vistry profits take an about turn 

 

Vistry’s southern division miscalculated its own build costs by 10% on nine of its developments, reducing the board’s expectations. As a result their adjusted profit before tax for FY24 reduced by c. £80m, for FY25 by c. £30m, and FY26 by c. £5m. The knock-on effect was that the company’s shares fell by 30%. 

 

The Renters’ Rights Bill got its second hearing

 

The Renters’ Rights Bill, the successor of the Renters’ Reform Bill, got its second reading today in the House of Commons. The house debated the tweaked legislation before voting it through to the committee stage.

 

Rics Residential Survey September 2024

 

Despite an increase in stock and a pick up in buyer demand. Agreed sales remained consistent but not ballooning in September 2024 as prices, nationally, picked up, despite the West Midlands, the South West and East Anglia lagging. RIC’S surveyors expect the market to gain momentum over the next 3-12 months, with prices increasing with every potential rate trim.

 

 

For those renting, stock levels continued to reduce in September 2024 as some landlords hoping to avoid any potential CGT increase look for a quick completion before budget day. Should the Government follow through with a delayed start date, expect more stock to hit the shelves and rents to rise.

 

 

Bank of England’s Credit Conditions Survey – September Q3 2024

 

The Bank of England’s Credit Conditions Survey lending snapshot in Q3 2024 showed a steady market; secured lending for house purchases remained unchanged in Q3. Yet for those remortgaging lending decreased; homeowners biding their time in the hope of better rates later on in the year or opting to move on.

 

 

Construction Output August 2024

 

The improving weather and political certainty fed construction output which grew by 0.4% in August 2024, following an unrevised fall of 0.4% in July 2024. This was largely driven by an increase in new work up 1.6%, predominantly driven by infrastructure projects while repair and maintenance dropped down 1.0% with schools out and holidays booked in.

 

 

Timeline for Cladding works

 

The Ministry of Housing, Communities and Local Government sets out a timeline for cladding remedial work to begin. Forcing developers into action while increasing the already stretched Building Safety Regulator’s work load. This news will provide some relief to those trapped but little comfort, as many still face years before their building is signed off. 

 

Cladding works proposed timeline:

– New remediation acceleration plan by the end of 2024.

– 6 months from this date to agree on which buildings need remediation

– Then another 12 months to start work 

 

Developers who haven’t put funds aside or been remiss in assessments could quickly find any recent profits or “optimism” for 2025 diminish. 

 

First time buyers take a hit -Rightmove’s weekly mortgage tracker

 

Rightmove’s weekly mortgage tracker showed that the average first-time buyer, with a 20% deposit and a 30 year term, paid over £350, up by 61%, compared with five years ago, while the average asking price of a typical first-time buyer type property increased by 18% comparatively.

 

The result: first-time buyers are forced to, save longer, move further afield and agree to longer terms. 

 

 

And that concludes another UK Property News Recap – 11.10.2024. If you have any comments or suggestions, please get in touch here