At the start of the week, UK Property News looked set to be fairly predictable but as the week unfolded the country found itself engulfed in economical and political dramas that changed the narrative. From Rightmove’s predictable HPI analysis to better than expected inflation data that swung the MPC vote in favour of a rate pause at 5.25%. Then there was PM Rishi Sunak, who clutching at voting straws decided to ignore green business, to focus on what he believes the public wants. Welcome to week 3 of the UK property News Recap.
Rightmove Asking Price Index
The week kicked off with Rightmove providing its latest insight into UK asking prices. Many buyers and sellers took a break over the summer to get some perspective on the property market. For sellers, after months of negative news on house prices and rate hikes, they have entered the autumn market with slightly more realistic expectations than usual, for the time of year. Whilst also hoping recent speculation that the base rate may be close to peaking and lenders recent reductions in their rates will revive confidence, encouraging buyers off the fence. This was reflected in autumn listings opting to price only 0.4% higher in August – no doubt with the expectation of being chipped to a palatable level.
For those sellers who’ve weathered the summer market, they have changed tack, proactively reducing their prices to enable a move.
This was demonstrated by the proportion of property reductions based on a 5 year pre-pandemic average increasing 5.1% to 36.3%. The average reduction also increased 0.7% to 6.2%. In money terms this is a £22,709 price drop on the average house price which currently sits at £366,281 on Rightmove’s ASKING price index.
Hamptons Rental Prices
On the same day Hamptons, released its August Lettings Index which is based on Countrywide’s group data of 90,000 let & managed properties per year. Unsurprisingly, this broke yet another year on year record, with the annual rate of growth increasing by 12%. This meant that the average rent in the UK has increased by £296 a month since January 2020 to £1,300 pcm.
Across the UK, London pipped Scotland to the post, with the biggest increase in annual growth year on year at 17.1% versus Scotland’s 13.4%.
Not to be outdone the ONS, released its rental index a few days later. Their data is based on over 450,000 private rental prices in England, 30,000 in Wales, 25,000 in Scotland, and 15,000 in Northern Ireland annually.
This deduced that average rental prices had increased by 5.5% in the 12 months to August 2023. Within England, London had the highest annual percentage change since the London data series began in January 2006 to 5.9%. While the North East & South West saw the lowest, 4.8%. However in this index Scotland increased 6% & Wales 6.5%.
Whilst the rental market was booming the sales market was beginning to display growing restraint as house prices increased by only 0.6% to £289,824 in July. A lot of these sales will have been agreed at the start of the year when rates seesawed from a mild 4% rate reprieve post mini budget before soaring back above 6% with increased inflation figures. Over time, it’ll be interesting if this data remains positive once more transactional data is added.
On a transactional note; the ONS also released data on residential transactions volumes which decreased 26% in both England and Wales over the year to March 2023. In addition, detached properties fell out of affordability favour as sales volumes decreased by 34% in England & 34% in Wales over the course of a year.
Bank Of England
There was much conjecture over whether the Monetary Policy Committee would vote for an increase or not. Goldman Sachs and Citigroup placed their bets early on one more increase, before lower than expected inflation figures were released on Wednesday. This gave the Bank of England pause for thought at 5.25% which will come as a relief for homeowners looking to remortgage and those “tracking” the housing market and its rates. All eyes now turn to lenders and what swapsies they will do to garner business.
Net Zero Backtracking
At Number 10, there was a source leak which meant PM Rishi Sunak was called out early to service it. Apparently it required a U-turn to be added on net zero policies & some others that never existed.
Despite increased boiler grants to £7,500, the pressure to improve or insulate from both the cold and future costs were abandoned in favour of the short term. Was this decision based on concern for increasing the financial burden on the already stretched general public? Or was this just a desperate attempt to recreate the same win across the country that Uxbridge did, in the latest bi-election? Please place your vote in the bins provided.
And that concludes this week’s UK property news recap, as ever please feel free to leave comments or further observations here.