05 2020 Fine & Country National Housing Market Update - May 2020

MAY 2020

N AT I O N A L H O U S I N G M A R K E T U P D AT E

KEY STATS E N G L A ND A N D WAL ES

£686,000

£1,013,853

0.92%

£596

£46.7bn

14,812

LATEST DATA

QUARTERLY CHANGE

ANNUAL CHANGE

MORTGAGE APPROVALS

56,161

0.8%

-9.5%

RESIDENTIAL TRANSACTIONS

99,440

0.7%

0.3%

GROSS MORTGAGE LENDING

£22.6 bn

1.0%

2.9%

NEW HOME STARTS (QT)

24,340

-31.2%

-15.9%

NEW HOME COMPLETIONS (QT)

39,550

12.4%

0.6%

2 I PREMIUM MARKETS I NATIONAL

MARKET OVERVIEW T W EF RYE OA MR L O CA K TD OWA WN 2 0H1E8 V-I E TH TH S Although thebeen festiveinseason is upon us, there is littleand seasonal ‘good accustomed will to all’ The UK has lockdown for over a month peoplecheer haveand become evident the political continues to dominate the headlines as all eyes to their across new lifestyles.

Rishiarena.

SunakBrexit announced unprecedented support and Boris await thefought final outcome. the conclusion, there arefor sureour to heroes’ be implications Johnson Covid-19Whatever and welcomed a baby boy.

‘Clap every for sterling andhas thehelped economy.

2018 draws to afeel close, are we closer predicting Thursday makeAsneighbourhoods closer thanany ever, withtomany doingwhat their we can the expect in 2019? The upward trajectory seen in the housing market throughout bit for community.

spring has been interrupted, with the first signs of Covid-19 visible in the data.

GLIMMERS SPRING OF SEASONAL CHEER Throughout 2018 sales volumes across the housing market The spring housing market on aofwave of buyer positive have struggled, thanks to thesurged backdrop lower consumer sentiment following the election victory and Brexit demand and low levels of consumer confidence. However, resolution.

The first quarter saw a 0.4% annual increase latest data from the Bank of England indicates mortgage in transactions volumes were in the4% UK.higher In England the approvals in October than aand yearWales, ago, while average property in March was £232,648, the total price value of ofalending hit sold its highest monthly figure since1.3% higher than year ago. Prime prices rose in ofFebruary the the surge in atransactions prior market to the introduction and March,3%bySDLT 0.07%levy andin0.92%. approvals increased additional March Mortgage 2016. More sales took by 0.8% and the lending 1.0% from theany previous place across UK ingrew October than in month quarter. since July According Rightmove, theshows average time to secure buyer 2017, whileto Rightmove data properties in 2018ato was down by four compared to Q1 2019. date have taken an days average of 61 days from theThe startspring of marketing to being sold-subject-to-contract, one day market. housing market indices show a strong pre-Covid-19 shorter than last year and an improvement on the 65 days witnessed in 2016.

COVID-19 Despite the rise in the UK base rate in the summer, The residential market had to adapt quickly to lockdown. mortgage interest rates remain low. UK Finance report that Virtual becameaverage a must mortgage have and banks accepted online at 2.23%tours the current interest rate is lower valuations.

Even with new measures in place the residential than the rate both five and ten years ago, 3.14% and 6.11% market will be significantly impacted. respectively.

Adjusting for inflation, wages have risen over the past year, positive news for household finances.

The RICS residential survey reacted quickly to the hiatus. It reported a net balance of -74% of respondents experiencing a SENSE fall in newAND buyerSENSIBILITY enquiries during March. Mortgage approvals were down -9.5% on lastcrucial year. 373,000 property Sensible pricing remains to achieving a sale.transactions The stalled and 1 in 7 mortgages were covered by payment holidays November, average asking price of a property fell by 1.7% in (Zoopla). duringaccording lockdowntowill be the largestTransaction November numbers fall since 2012 minimal, mostly Covid-19.

Low volumes Rightmove, whilethose annualagreed houseprior pricetogrowth has moderated will make it the difficult look athouse pricing. throughout year.toAnnual price growth across the UK in the year to September was 3.5%, down from 4.6% a year ago, according to the official UK House Price Index.

ECONOMY Average prices across London remain slightly lower than a currently feeling the brunt ofaround Brexit the year the capitalshutting The ago, simultaneous down of economies uncertainty. globe is unprecedented. Few sectors of the economy have been left untouched. The shape of the outlook, whether V, U,

Across UK prime markets,the thelength average price of property L or even the W relies on knowing of lockdown, exit is down a fraction on a year ago.

However, across many strategy and the economic cost incurred. HM Treasury latest assets 2018 has not proved momentous. In the year to the consensus forecasts for GDP growth are -5.8% for 2020 and end of November the average price of gold has fallen by a return to 5% growth in 2021. Lockdown will have the biggest over 1%, the stock market (FTSE 100) by 6%, while the S&P impact on the second quarter with the economy expected to Global Luxury Index is 5.5% lower than a year ago, despite shrink by -12.2%. Emerging from lockdown, the new economic fine wines and classic cars boasting small positive returns. normal look different.

Employment earningsdemand will be Manywill commentators report evidenceand of pent-up dampened, and the budget deficit will be inflated. for higher priced properties, with prospective vendors waiting for more clarity before they commit to their purchase.

THE MONTHS AHEAD A CRYSTAL BALL With some European countries easing lockdown and Boris

Johnson back at work, we expect to see changes lockdown Unsurprisingly all current forecasts for 2019 areto issued with over the next few weeks.

It could take time for consumer a caveat relating to a deal being brokered between the UK confidence to come back and of forthe people secure in their and the EU. The Governor Banktooffeel England, Mark jobs, allowing to re-enter the housing market. eventThis of awill no-be Carney, has them reiterated his forecast that in the reflected in transactions over thefallnext 12 months. is likely we deal Brexit the economy may by over 8% andItaverage prices by upimprovement to 30%. Current from the willhouse see progressive from forecasts 2021 onwards.

Office for Budget Responsibility point to employment levels continuing rise inprice 2019, with average earnings, There may betosome fallsalong in the next 12 months, butwhile the inflation is predicted to edge back to the government’ s 2.0% market is likely to be insulated from major declines because it target.a period This may require gradual in riserecent in interest follows of well stable or lowa growth yearsrates, and a the base rate will to although the current view is that good balance between supply and demand. However,rise lower just 1.5 – 1.75% by 2021. earnings and weaker buyer sentiment could still put pressure onAcross prices. the Thehousing five yearmarket, outlook as for perprice 2018,growth many is likely to mirror pre-Covid-19 levels, a different commentators expect thealbeit widerviaUK market tojourney. outperform London. An average of independent forecasts predicts price Wegrowth expectacross somethe significant the way people UK will changes be 2.2% induring 2019.

In live following lockdown.

Many will not have missed their gruelling comparison, those commentating on the London market commutes and working from home may become a regular anticipate 2019 may well prove another year of falling occurrence.

Extra space for a across home-office the option to is anticipated prices. Compound growth the UKand to be liveinfurther fromofthe workplace maythe be next new trends in the region 11% – 14% over five years.

Forecasts for London vary less thanplaced 5% to over property searches, as well as widely, greaterfrom importance Only time will tell which trajectory is more likely to be on10%. outside space. true.

PREMIUM MARKETS I NATIONAL I 3

REGIONAL P R E M I U M M A R K E T S : TOP 5 %

£355,000 £462,428 +2.6% £242

£418,000 £571,737 +0.3% £302

£411,000 £546,208 +1.1% £284

£474,000 £621,161 +0.0% £319

£437,000 £564,822 +0.3% £277

£383,000 £488,019 +3.4% £267

£591,000 £807,323 +3.0% £402

4 I PREMIUM MARKETS I NATIONAL

£685,000 £908,765 –1.3% £465

£800,000 £1,103,274 +0.0% £491

£1,420,000 £2,307,550 +0.1% £1,203

NATIONAL P R E M I U M M A R K E T S : TOP 5 %

PROPERTIES SOLD ABOVE THE PREMIUM PRICE THRESHOLD

The premium price threshold is the value over which the top 5% of property sales occur. The chart shows a rolling 12 month change in the average price paid for premium properties compared to the previous 12 month.

ENGLAND & WALES

2%

1%

0%

-1% -2%

-3%

-4% APR 2019

MAY 2019

JUN 2019

JUL 2019

AUG 2019

SEP 2019

OCT 2019

NOV 2019

DEC 2019

JAN 2020

FEB 2020

MAR 2020

Source: Dataloft, Land Registry

BY PROPERTY TYPE OVER THE LAST 12 MONTHS, PROPERTIES SOLD ABOVE THE PREMIUM PRICE THRESHOLD

An individual premium price threshold is calculated for each property type based on sold prices in the last 12 months. The chart shows the average price paid per square foot for all of these premium properties.

ENGLAND & WALES

£1,200

£1124 £900

£663

£600

£596 £503

£493

SEMI-DETACHED

DETACHED

£300

0 FLAT/APARTMENT

TERRACED

ALL PROPERTY Source: Dataloft, Land Registry

PREMIUM MARKETS I NATIONAL I 5

TRANSACTIONS A N D K EY P R I C E P O I N T S

ALL PROPERTIES SOLD ACROSS THE COUNTRY

All proper ty

ENGLAND & WALES

Chart shows a rolling 12 month change in transactions compared to the previous 12 month period for all properties and those priced at £1m or over.

£1m+

0% -2.5% -5% -7.5% -10% -12.5% MAR 2019

APR 2019

MAY 2019

JUN 2019

JUL 2019

AUG 2019

SEP 2019

OCT 2019

NOV 2019

DEC 2019

JAN 2020

FEB 2020

Source: Dataloft, Land Registry

£232,648 £686,000 £1,013,853

£216,154 £718,033 £1,142,530

£181,355 £564,595 £888,312

£218,383 £547,122 £750,493

£353,197 £862,268 £1,228,519

£236,216 £679,144 £984,687

6 I PREMIUM MARKETS I NATIONAL

NATIONAL MA IN S TR E AM MAR K E T

ALL PROPERTIES SOLD ACROSS THE REGION

Rolling 12 month change in the average price paid for all properties sold compared to the previous 12 month period.

ENGLAND & WALES

1.5%

1.25%

1%

0.75% 0.5%

0.25%

0% APR 2019

MAY 2019

JUN 2019

JUL 2019

AUG 2019

SEP 2019

OCT 2019

NOV 2019

DEC 2019

JAN 2020

FEB 2020

MAR 2020

Source: Dataloft, Land Registry

BY PROPERTY TYPE OVER THE LAST 12 MONTHS OF ALL PROPERTY SALES

Average price paid per square foot for all property transactions.

ENGLAND & WALES

£400

£300

£327 £276 £248

£234

£200

£206

£100

0 FLAT/APARTMENT

TERRACED

SEMI-DETACHED

DETACHED

ALL PROPERTY Source: Dataloft, Land Registry

PREMIUM MARKETS I NATIONAL I 7

AVAILABILITY A N D TI M E TO S E L L

AVERAGE NUMBER OF DAYS TO SELL

NATIONAL

Average number of days from when a property is first marketed on Rightmove to when the estate agent marks it as “sold subject to contract”.

100

80

77 71

67

64

60

63

62

62

62

62

64

67

71

76 67 61

40

20

0 JAN 2019

FEB 2019

MAR APR MAY 2019 2019 2019

JUN 2019

JUL AUG SEP OCT NOV DEC 2019 2019 2019 2019 2019 2019

JAN 2020

FEB 2020

MAR 2020

Source: Rightmove

PROPERTIES AVAILABLE TO BUY PER AGENT

Average stock per agent calculated by the average number of properties an agent has on Rightmove each day across the month.

NATIONAL

60 50 40 30 20 10 0 JAN 2019

FEB 2019

MAR APR 2019 2019

MAY 2019

JUN 2019

JUL AUG SEP OCT NOV DEC 2019 2019 2019 2019 2019 2019

JAN 2020

FEB 2020

MAR 2020

Source: Rightmove

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