National Market Report - January 2019

Page 1

JANUARY 2019

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

Benson House Penthouse at 375 Kensington High Street designed by CID Interieur of Fine & Country Interior Design. Copyright: St Edward


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

£683,000

£1,021,621

-0.03%

£607

£50.9bn

15,892

LATEST DATA

QUARTERLY CHANGE

ANNUAL CHANGE

63,728

-0.8%

-1.7%

RESIDENTIAL TRANSACTIONS

100,930

2.1%

-0.5%

GROSS MORTGAGE LENDING

£22.2bn

1.4%

0.7%

NEW HOME STARTS (QT)

35,010

0.5%

-4.7%

NEW HOME COMPLETIONS (QT)

35,160

22.4%

2.7%

MORTGAGE APPROVALS

2 I PREMIUM MARKETS I NATIONAL


MARKET OVERVIEW P PEY YE N EAW E AART ? WA S 2 0 1 8 H- ATH R YTH Although festive season is upon us, there is little cheer andend ‘good will towith all’ The start the of 2019 looks set to continue in much theseasonal same vein as the of 2018, evident across the continuing political arena. continues to of dominate the headlines as allcloser eyes Brexit discussions apaceBrexit and the deadline 29th March looming ever await final outcome. Whatever conclusion, sure tohappens be implications on thethe horizon. However, markets the desire certaintythere and, are whatever on the for sterling theineconomy. As 2018 to a close, are we any year closer to predicting what politicaland stage 2019, at least somedraws resolution is assured as the progresses. Increased we can expect in 2019? certainty and clarity should bring more stability to reassure both buyers and sellers. RATE OF PRICE GROWTH HALVES GLIMMERS OFeasy SEASONAL CHEER 2018 was not an year for the UK’s housing market but,

while some places and buyers opportunities arose Throughout 2018 sales volumessuffered, across the housing market for others. Buyers were understandably cautious and demand have struggled, thanks to the backdrop of lower buyer for properties remained subdued in theconfidence. final monthsHowever, of the year. demand and low levels of consumer Interest from investors, in of particular, impacted by increased latest data from the Bank Englandwas indicates mortgage costs and in regulation. with Government support approvals October This, werealong 4% higher than a year ago, while in the form of Help to Buy, the way for anfigure increase the total value of lending hit paved its highest monthly sincein the surge in transactions prior report to the introduction first-time buyers. UK Finance that in six of of thethe first ten additional 2016.buyers Moreoutstripped sales took months of3% theSDLT year, levy loansintoMarch first-time place UK inmovers. OctoberBythan in any the month since thoseacross made the to home October value of July 2017, while Rightmove data shows properties in 2018 lending to first-time buyers was 12% higher than a yeartoearlier. date have taken an average of 61 days from the start of marketing one day months After fallingtotobeing a lowsold-subject-to-contract, of 56 days in the busy summer shorter thanJune, last year and an improvement on the 65 days of May and the time taken to sell properties crept up witnessed in 2016. over the final months of the year reaching 65 days in November.

While this variation is not sales in rateunusual, in the summer, Despite theseasonal rise in the UK base November 2018 did take longer than in November 2017 mortgage interest rates remain low. UK Finance report that (62 days). Despite this, sales rates were fairly stable over 2018, at 2.23% the current average mortgage interest rate is lower not witnessing the large fall that some anticipated. In the year than the rate both five and ten years ago, 3.14% and 6.11% to November, the levelfor ofinflation, sales recorded acrossrisen the over UK was respectively. Adjusting wages have just past 3% below the level seenfor in household the same period a year earlier. the year, positive news finances. AlthoughAND demand levels were more subdued, a lack of stock SENSE SENSIBILITY

of properties to buy continued to put upward pressure on Sensible remainslevel. crucial achieving a sale. prices atpricing the headline Thetoaverage price of a The home price of a property fell by 1.7% in November, average asking continued to rise over 2018, albeit with rates of price the largest November since according appreciation slowing asfallthe year2012 progressed. Attoa national Rightmove, while annual house price growth has level, according to the ONS, average prices rosemoderated by 2.7% in throughout the to year. Annualalmost house half pricethe growth the 12 months October, rate ofacross 5.1% the seen UK in the year to September was 3.5%, down from 4.6% a year earlier. There were, however, regional disparities ina year according to the official UKwell House Price Index. theseago, figures. London, as has been documented, was Average prices across London remain slightly lower than a most impacted in the year, not just by uncertainties year ago, the capital currently feeling the brunt of Brexit surrounding Brexit but also by affordability concerns and the uncertainty. high costs of buying. Prices rose most strongly in the North West, Yorkshire and the Humber and East Midlands.

Across inthe UK prime average of property Trends asking pricesmarkets, provide the a useful leadprice indicator for is down a fraction on a year ago. However, across many the future direction of the market. Rightmove report that assets 2018 has not proved momentous. In the year to the average asking prices fell in the final two months of 2018 by end of November the average price of gold has fallen by 1.7% and 1.5% respectively. This is likely to translate into a over 1%, the stock market (FTSE 100) by 6%, while the S&P further slowdown in the rate of price growth for achieved Global Luxury Index is 5.5% lower than a year ago, despite sales prices in early 2019, with further small falls possible in fine wines and classic cars boasting small positive returns. places. The view of agents in the latest of RICS Residential Many commentators report evidence pent-up demand Market Survey also tallies with this, although stability for higher priced properties, with prospectivemore vendors iswaiting anticipated over the longer term. for more clarity before they commit to their purchase.

AFFORDABILITY EASING? A CRYSTAL BALL Adjusted for inflation, average wages reached their highest

level since 2011allatcurrent the endforecasts of 2018 with the rate of growth Unsurprisingly for 2019 are issued with ata caveat its highest sincetoNovember 2008. This, coupled the relating a deal being brokered betweenwith the UK and the EU. The Governor of the Bankrates of England, continuation of competitive mortgage (despiteMark the Bank of relief a noCarney, hasrise reiterated his rates) forecast that in the event of England in interest should provide some dealhome Brexitowners the economy may fall by over 8%Affordability and average for and potential purchasers. house prices by up to 30%. from thewhich concerns remain a key factorCurrent in houseforecasts buying decisions Office for Budget Responsibility point to employment vendors should take heed of when setting asking prices,levels but continuing to rise in 2019, along with average earnings, while slowing price appreciation and rising incomes could ease the inflation is predicted to some. edge back to the government’s 2.0% affordability burden for target. This may well require a gradual rise in interest rates, although the current view is that the base rate will rise to PRIME … READY AND WAITING just 1.5 –BUYERS 1.75% by 2021. The UK’sthe departure from theasEU weighing Across housing market, peris2018, manymore heavily on the minds of buyers in the of the market than commentators expect theupper wider echelons UK market to outperform inLondon. the mainstream market. Buyers at the top endpredicts of the market An average of independent forecasts price are oftenacross morethe discretionary than needs-based growth UK will be rather 2.2% during 2019. In purchasers. are active on in the often comparison,Those those who commentating the market Londonare market anticipate 2019 in may well prove another looking to factor price discounts which is year actingofasfalling a deterrent is anticipated prices. Compound growth to vendors who do not needacross to sell.the AsUK such, both buyerstoand be in theare region of 11% – 14% over nextthat fivethey years. vendors waiting but that does notthe mean are not Forecaststhe formarket London vary widely, from less than 5% over watching carefully. Once clarity emerges, thisto pent-up 10%. Only will and tell which more likely be demand willtime release activitytrajectory levels areisexpected to to rise. true. PREMIUM MARKETS I NATIONAL I 3


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

£346,000 £454,117 +0.5% £236

£414,000 £571,279 +2.2% £302

£406,000 £539,740 +0.6% £292

£469,000 £621,114 +3.0% £334

£430,000 £555,938 +3.0% £290

£379,000 £487,660 +3.8% £273

£591,000 £791,166 +3.1% £418

4 I PREMIUM MARKETS I NATIONAL

£681,000 £928,414 +2.6% £502

£798,000 £1,108,663 +0.7% £538

£1,450,000 £2,409,402 +2.3% £1,261


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

ENGLAND & WALES

5%

4%

3%

2%

1%

0%

-1% DEC 2017

JAN 2018

FEB 2018

MAR 2018

APR 2018

MAY 2018

JUN 2018

JUL 2018

AUG 2018

SEP 2018

OCT 2018

NOV 2018

Source: Dataloft, Land Registry

ENGLAND & WALES

£1,200

£1107 £900

£695

£600

£538

£536

SEMI-DETACHED

DETACHED

£607

£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 proper ty

ENGLAND & WALES

£1m+

20%

10%

0%

-10%

-20% NOV 2017

DEC 2017

JAN 2018

FEB 2018

MAR 2018

APR 2018

MAY 2018

JUN 2018

JUL 2018

AUG 2018

SEP 2018

OCT 2018

Source: Dataloft, Land Registry

£228,958 £683,000 £1,021,621

£216,679 £719,247 £1,196,314

£179,228 £557,810 £877,510

£213,938 £546,055 £750,301

£347,180 £867,626 £1,236,787

£231,792 £675,298 £978,698

6 I PREMIUM MARKETS I NATIONAL


NATIONAL MA IN S TR E AM MAR K E T

ENGLAND & WALES

4%

3%

2%

1%

0% DEC 2017

JAN 2018

FEB 2018

MAR 2018

APR 2018

MAY 2018

JUN 2018

JUL 2018

AUG 2018

SEP 2018

OCT 2018

NOV 2018

Source: Dataloft, Land Registry

ENGLAND & WALES

£400

£300

£309 £272 £241

£227

£200

£200 £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

NATIONAL

80

72 67 60

65

62

65 61

59

56

56

57

MAY 2018

JUN 2018

JUL 2018

60

61

61

AUG 2018

SEP 2018

OCT 2018

40

20

0 NOV 2017

DEC 2017

JAN 2018

FEB 2018

MAR 2018

APR 2018

NOV 2018

Source: Rightmove

NATIONAL

60 50 40 30 20 10 0 NOV 2017

DEC 2017

JAN 2018

FEB 2018

MAR 2018

APR 2018

MAY 2018

JUN 2018

JUL 2018

AUG 2018

SEP 2018

OCT 2018

NOV 2018

Source: Rightmove

T: +44 (0)207 079 1515 E: parklane@fineandcountry.com fineandcountry.com

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