This week both major political parties tested potential housing plans to reel in younger voters in the media. The number of millionaire property owners depleted alongside new build numbers. Lenders passed the low interest rate baton and Rightmove tried to drum up business. Welcome to another UK Property News Recap.

 

Speculation over government plans to introduce 99% mortgages

The week kicked off with speculation that the Government is considering introducing 99% mortgages, to get those who could afford a mortgage, but not the deposit, out of the rental market and onto the property ladder. Despite this scheme potentially helping those who couldn’t otherwise afford to get on the ladder, it runs the risk of increasing prices as more buyers jostle for stock.

 

GOV POTENTIAL PLANS = 99% mortgages backed by taxpayers money 

PURPOSE = gain younger votes & appease builders/ party donors 

EFFECT = drive up property prices & demand

RISK ASSESSMENT = negative equity, defaults & repossessions

SOLUTION = Offload debt elsewhere

 

Begbies Traynor Red Flag Report

Begbies Traynor latest Red Flag Alert reported more than 47,000 businesses were near collapse in the UK at the start of 2024, a 25.9% increase on the prior quarter. Construction and Real Estate sectors represented nearly 30% of all businesses in critical financial distress with construction coming top of the leaderboard, closely followed by the Real Estate Sector at number three. 

 

 

Appreciation comes with time 

Analysis of Land Reg data by Estate Agency Hamptons, showed an average of 93% of households who sold their property, just under 9 years later, got more than they paid for it. Those that bought a property within the last 20 years made on average 48% more than they paid for it in 2023.  Demonstrating it pays to think long term but also never say never to moving again. 

 

Computer says No – Probate delays

The Telegraph investigated why the delays with probate are taking so long. To summarise:

“There are currently fewer than three full-time equivalent registrars and deputies in the probate registry workforce where previously there were 30.” 

Case closed 

 

Savills – the number of property millionaires depletes 

Savills released data suggesting the number of property millionaires fell from its pandemic peak, but remains 28% higher than 2019.

 

The pandemic race for space reversal proved costly for those out of town.  The value of Britain’s £1m home market now stands at £1.32 trillion down from £1.43 trillion in 2022⁩. London saw the smallest decrease in property millionaires,  their numbers falling by  -4.0%; while outside London saw the most significant drop in property millionaires.

 

 

“Buyers and sellers have realised the grass isn’t always greener out of town. Many believed that life would never be the same again post-pandemic. Offices would become surplus to requirement and we’d all be scheduling our Zooms to suit. 

Though office-based work has reduced, employers are clawing back days in the office. Faced with long journey times and Network Rail delays, this has led to many questioning their move.”

 

Crest Nicholson preliminary results

Over at Crest Nicholson, preliminary results for the year ending 31 October 2023 showed the damage high interest rates, a fire resulting in a legal claim, increased build costs at their Farnham site and building safety payouts had done to their overall revenue. 

 

Result = Revenue down 28% at £657.5m (FY22: £913.6m)

 

 

Mortgage rates go up and down

Hoping to drum up business, Nationwide offered its lowest rates in 8 months, this week. Deducting two, three, five and ten year fixed rate products: 

 

• New customers: up to 0.80% off, up to 95% LTV
• First time buyers: up to 0.74% off, up to 95% LTV
• Remortgage: up to 0.80% off, up to 90% LTV

 

While Santander took a breather, increasing their rates by 0.05 – 0.2%. This is widely suspected to be due to application management response overload rather than inflation concerns.

 

Labour promises 25-year mortgages that already exist

Shadow chancellor Rachel Reeves keen to show housing initiative set up a review into “removing regulatory barriers to help trigger a broader cultural shift” around 25-year fixed-rate mortgages across the UK.

  

These however, already exist and generally aren’t overly popular as many prefer to ride the wave of cheaper deals than cling to a slightly higher, yet consistent figure. 

This policy may get first time buyers on to the ladder but moving up to the next rung from there could prove costly when remortgaging

 

TwentyCi Data claim negative effects of rates were overestimated.

On Wednesday, TwentyCi in their end of year 2023 summary. claimed the negative effects of rates in 2023 were overestimated. Their rationale being prices hadn’t in fact dropped as much as previously forecasted. This may be true in some areas of the UK. Northern Ireland and Scotland particularly fared well boosting OVERALL percentage numbers, but London and Southern England haven’t felt the benefit. 

 

The report claimed:

• Average price achieved ACROSS the UK of their original asking price = 96.6%, a decrease from the 99.4% achieved in 2022.
• Price alterations rose by 66% compared with 2022 
• The volume of exchanges fell by more than 20% year on

The effect for many, can’t be underestimated.

 

 

Housing supply indicators of new supply in England Q3 2023

Housing supply indicators showed a slowdown in both completions and starts post Q2. The sudden upsurge in activity at the start of the year was a result of builders trying to avoid new building standards relating to energy performance & electric vehicle charging points. Without this deadline, the results would have potentially been worse, given the increase in build costs as a result of inflation. 

 

Seasonally adjusted, quarterly figures for new build dwellings in England for 2023:

• Starts est: 21,300, a 68% dec when compared to 2023 Q2 & a 52% dec when compared to 2022 Q3. 
• Completions est: 39,990, a 1% inc when compared to 2023 Q2 & 5% dec when compared to 2022 Q3.

 

 

Year-to-year to 30 September 2023, the decrease is less marked but there is no escaping 2023 rate increases held back developer intentions.

 

• Starts est: 165,990, a 8% decrease when compared to the year to 30 September 2022.
• Completions est: 166,310, a 4% decrease when compared to the year to 30 September 2022

 

Rightmove’s February appeal

On Thursday, Rightmove hit the headlines with new analysis on when the best time is to sell. Based on their data from 2012 onwards, they deduced that the best time to sell was February. Keen to impress upon buyers and sellers that demand was up 8% on last year and the number of property listing for buyers had increased 11%, they highlighted that:

 

“On average, homes listed in February have taken 51 days to find a buyer – just ahead of March’s 52 days, and level with January.

 In addition, an average of 66.4% of homes listed in February have gone on to find a buyer – the best chance of finding a buyer alongside April – just piping second placed March’s 66.3%.

February listings are also the most likely to go on and finalise a completion of sale, and the least likely to be withdrawn by the owner from the market.”

 

So, when is the best time to sell…. February, March…and April isn’t too bad either:)

 

And that concludes another UK Property News Recap. Should you have any comments or suggestions, as ever, please get in touch here.