NOVEMBER 2018
E A S T O F E N G L A N D M A R K E T U P D ATE
KEY STATS E AS T O F E N G LA N D
£681,000
£922,450
1.36%
£499
£4.52bn
1,300
LATEST DATA
QUARTERLY CHANGE
ANNUAL CHANGE
MORTGAGE APPROVALS
65,269
1.7%
-0.7%
RESIDENTIAL TRANSACTIONS
98,400
-0.8%
-2.7%
GROSS MORTGAGE LENDING
£22.1bn
0.1%
2.3%
NEW HOME STARTS (QT)
35,010
0.5%
-4.7%
NEW HOME COMPLETIONS (QT)
35,160
22.4%
2.7%
2 I PREMIUM MARKETS I EAST OF ENGLAND
MARKET OVERVIEW A U T U M N S HA D E S
Brexit and the budget have dominated headlines over the past quar ter, and while the latter provided few fireworks for the real estate market, the deal or no deal question continues to linger. Rhetoric has been more positive in recent weeks; now all eyes are on the EU summit in mid-November. Despite the uncer tainty, annual house price growth remains positive across England and Wales, except London, although transaction levels remain muted. WATCHING AND WAITING There was positive economic news in the Budget: eight years of economic growth, 3.3 million new jobs since 2010 with 800,000 more forecast by 2023, and wage growth at its highest level in nearly a decade. Independent forecasts from the Office for Budget Responsibility (OBR) also predict inflation to fall back to the government’s target of 2% over the course of 2019. However, sales volumes remain low, down 6.2% across the East of England in the twelve months to June compared to a year earlier. After a brief reprieve over the summer the number of mortgage approvals across the UK has also slowed. House price growth across much of the UK is slowing, and the East of England is no exception. Annual house price growth in the year to August (UK HPI) was 1.6%, down from 6.0% a year earlier. Across the prime market, annual price growth was 1.4% over the past year.
BUDGET WINNERS AND LOSERS Housebuilders and first-time buyers were the main real estate beneficiaries of the Autumn Budget. As the government aims to meet its ambitious 300,000 new homes per year target, a range of initiatives were announced. Additional monies totalling £500 million for the Housing Investment Fund to deliver 650,000 new homes, new partnerships with Housing Associations, removal of the revenue cap for local councils and a business-backed guarantee scheme for SME builders are all in the pipeline. As too is large-scale infrastructure investment and moves to reinvigorate the high street, with proposals to allow conversion of unused retail units to residential and changes to business rates relief for small businesses. With first-time buyer numbers at an all-time high, rumours that the Help to Buy Equity scheme would be scrapped post April 2021 proved unfounded. Instead the scheme will
be extended until the end of March 2023, with the value of the loan subject to a new regional cap. Across the East of England the cap will be £407,400. Based on analysis of new build property sales over the past year, 76% would have qualified under the new cap. The SDLT relief introduced for first-time buyers in the 2017 Budget will also be extended to all those who purchase a shared-ownership property. Those who have purchased a shared property since 22nd November 2017 will also be able to claim the relief retrospectively. The government is also going to consult on reforms to lettings relief which looks set to impact on many so-called ‘accidental’ landlords. Non-resident buyers will face a 1% additional SDLT surcharge over and above all other costs. Although this is yet another tax rise, it is less than the 3% indicated by the government earlier this autumn.
THE VALUE OF PRIME HM Treasury netted just over £1 billion in stamp duty receipts (SDLT) across the East of England in the year to the end of March 2018, up 8.5% on a year previously. This was despite a fall in sales volumes of 1.6%. One fifth of receipts were attributed to the purchase of additional properties, with £200 million raised from the 3% additional levy alone. Virtually 50% of all residential taxation receipts were attributable to properties purchased for over £500,000, 17% were from properties purchased for over £1 million. The average price for prime market property exceeds £1 million in two of the main cities/towns across the East of England: Cambridge and Watford. The prime market across Southend-on-Sea is currently experiencing the highest level of growth, average prices of prime property having risen by 3% over the past year.
PREMIUM MARKETS I EAST OF ENGLAND I 3
PREMIUM MARKETS T OP 5 % B Y R EG I O N
£347,000 £453,896 +0.5% £234
£415,000 £578,736 +5.0% £309
£405,000 £536,386 +0.8% £289
£465,000 £614,344 +2.4% £328
£425,000 £547,925 +2.4% £287
£375,000 £480,633 +2.7% £266
£585,000 £778,953 +2.6% £414
4 I PREMIUM MARKETS I EAST OF ENGLAND
£681,000 £922,450 +1.4% £499
£792,000 £1,094,501 –1.1% £533
£1,470,000 £2,456,426 +6.1% £1,285
TOP 5% E AS T O F E N G LA N D PR E MI UM MA R KE T
£369,000 £463,937 –2% £219
£469,000 £654,162 +0% £378 £487,000 £619,235 –1% £307
£843,000 £1,138,740 +2% £552
£550,000 £717,343 0% £371
£495,000 £610,611 –1% £365
£1,150,000 £1,508,495 –2% £674
£545,000 £685,248 –2% £356 £673,000 £873,913 +2% £444
£623,000 £781,063 +3% £429
PREMIUM MARKETS I EAST OF ENGLAND I 5
TOP 5% E AS T O F E N G LA N D PR E MI UM MA R KE T
EAST OF ENGLAND
6%
5%
4%
3%
2%
1%
0% OCT 2017
NOV 2017
DEC 2017
JAN 2018
FEB 2018
MAR 2018
APR 2018
MAY 2018
JUN 2018
JUL 2018
AUG 2018
SEP 2018
Source: Dataloft, Land Registry
EAST OF ENGLAND
£600
£504
£450
£530
£546
£561 £499
£300
£150
0 FLAT/APARTMENT
TERRACED
SEMI-DETACHED
DETACHED
ALL PROPERTY Source: Dataloft, Land Registry
6 I PREMIUM MARKETS I EAST OF ENGLAND
MAINSTREAM E AS T O F E N G LA N D MA I N STR E A M MA RK E T
Transactions
EAST OF ENGLAND
Average sales price
10%
5%
0%
-5%
-10% SEP 2017
OCT 2017
NOV 2017
DEC 2017
JAN 2018
FEB 2018
MAR 2018
APR 2018
MAY 2018
JUN 2018
JUL 2018
AUG 2018
Source: Dataloft, Land Registry
EAST OF ENGLAND
£400
£300
£304
£288
£309
£307
£301
SEMI-DETACHED
DETACHED
ALL PROPERTY
£200
£100
0 FLAT/APARTMENT
TERRACED
Source: Dataloft, Land Registry
PREMIUM MARKETS I EAST OF ENGLAND I 7
KEY STATS E AS T O F E N G LA N D
£283,205 £681,000 £922,450
£188,579 £395,000 £508,586
£245,480 £489,000 £626,347
£290,917 £600,000 £738,077
£398,074 £944,000 £1,286,153
£307,410 £719,000 £967,185
T: +44 (0)207 079 1515 E: parklane@fineandcountry.com fineandcountry.com
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