This week forecasts were rewritten and survey reports reflected upon. Portals clashed while CPI refused to play ball and the ONS painted a picture of time gone by. Welcome to another UK Property News Recap.
Rightmove HPI January 2024
According to Rightmove’s HPI, buyer & seller confidence received a New Year “rate” boost. When compared against the same time last year; demand is up 5%, stock levels up 15% & agreed sales up 20%, in the first week of 2024. Emboldened, sellers increased their average asking price by 1.3% in January 2024, forgetting realism sells. Things may be improving but we aren’t out of the woods yet.
Knight Frank about turn on house price and rental predictions for 2024
This week, Knight Frank decided to backtrack on their October 2023 house price and rental predictions, citing falling inflation and reduced interest rates as the cause. This alongside financial markets betting on up to five base rate cuts this year as opposed to the one foreseen in October was motivation enough for a rewrite.
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UK RENTAL FORECAST
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The sales/lettings see-saw – when one goes up, the other goes down.
One thing is for certain – nothing is certain
Crest Nicholson profit predictions
Crest Nicholson rolls back pre-tax profits predictions to £41m for the financial year to October. “That is 14% below the consensus forecast of £47.5m, already cut back from £74m last summer.” As a result of this shares have halved from their peak causing the acquisition vultures to circle in anticipation.
JP Morgan take aim at Rightmove
JP Morgan is off Rightmove’s Christmas card list after it issued an “underweight” recommendation or a “sell” – pulling the company’s shares down 22p, or 3.9%, to 542¾p. Costar’s Acquisition of On the Market dampening the portal’s “right” to increased profitability by “moving” into their portal space.
CPI Surprise
For those hoping for a base rate cut, CPI rising wasn’t part of the plan. In December 2023 CPI rose for the first time since February 2023, increasing by 4.0% in the 12 months to December 2023, up from 3.9% in November.
The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from alcohol & tobacco, as a result of the increase in tobacco duty. Due to this many remain hopeful for Spring base rate cuts.
ONS House Price Index – November 2023
According to the ONS House Price Index, average UK house prices decreased by -2.1% (£6,000) in the 12 months to November 2023 making the average UK house price £285,000. England (-2.9%) & Wales (-2.4%) dragged prices down while Scotland (+2.2%) & Ireland (+2.1%) did the heavy lifting. London though saw the largest decrease at -6%.
In December 2023, the rental juggernaut came up against resistance – the annual percentage change in rental prices remaining unchanged since November 2023 at 6.2%. London remained at the top of the highest annual percentage change leader board at 6.8% while the North East was the lowest at 4.6%
RICS Residential Market Survey – December 2023
RICS Residential market survey showed an uptick in buyer demand and agreed sales in December 2023 demonstrating promise for the New Year. Speculation is this will result in an increase in sales volumes and completion times to shorten. Overall, prices are expected to remain negative in the short term before stabilising. Prospects for house price growth in the North of England, Scotland and Northern Ireland continue to outweigh any progress in the south.
Despite demand reducing over Christmas, Landlord instructions continue to fall resulting in +50% of those surveyed expecting rents to increase by 4% over the year ahead and for rental growth to average 5% per annum over the next 5 years.
Credit and Conditions Survey 2023 – Q4
The Credit and Conditions Survey showed that after a messy 2023 where demand for secured lending for house purchases and remortgaging decreased in Q4, lenders expectations are for an increase in borrowing for Q1 2024, spurred on by any base rate cuts.
Meanwhile…many householders continue to struggle. Lenders reported default rates on secured loans to households and losses increased overall in Q4. This trend is expected to continue into Q1 2024.
Mortgage Prisoners
Lastly, Mortgage prisoners look to Sunak for a way out after their debt was sold to companies such as Topaz Finance & Heliodor who have been feasting on their downfall by “creaming off extortionate revisionary standard variable rates, essentially since 2008”
And that concludes another UK Property News Recap.
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