MAY 2021
N O R T H E A S T M A R K E T U P D AT E
KEY STATS N O R TH E A S T
£376,000
£501,573
7.31%
£247
£733m
30
LATEST DATA
QUARTERLY CHANGE
ANNUAL CHANGE
82,735
-11.3%
45.3%
RESIDENTIAL TRANSACTIONS
190,980
31.2%
102.4%
GROSS MORTGAGE LENDING
£35.6 bn
25.8%
54.6%
NEW HOME STARTS (QT)
29,980
-4.5%
27.1%
NEW HOME COMPLETIONS (QT)
44,030
27.6%
11.4%
MORTGAGE APPROVALS
2 I PREMIUM MARKETS I NORTH EAST
MARKET OVERVIEW MAO R WDAERSD UVTIUNMGNF O S HA Brexit have dominated headlines over quarhas ter, bounced and whileback, the Only aand yearthe on budget from a full property market lockdown andthe thepast market latter fireworksdemand for theisreal estate market, the dealthe or market, no deal aquestion hittingprovided new highs.few Continued driving momentum across shortage continues to linger. Rhetoric has beenProtective more positive in recent weeks; nowroadmap all eyes to are on of supply underpinning price growth. measures are easing as the the EU summit in mid-November. theunderway. uncer tainty, annual house price growth ‘normality’ progresses, with economicDespite recovery remains positive across England and Wales, except London, although transaction levels remain muted. CONFIDENCE CLIMBS WATCHING AND WAITING Restrictions are lifting and the UK’s vaccine rollout is both
on track proving highly successful. Continued economic There wasand positive economic news in the Budget: eight support packages, announced the government in the years of economic growth, 3.3 by million new jobs since 2010 March Budget,more wereforecast a welcome boost, the at with 800,000 by 2023, andsupporting wage growth economy it reopens Consumer confidence is at its its highest as level in nearlyfully. a decade. Independent forecasts from thelevel Office forthe Budget (OBR) also highest since startResponsibility of 2008, the PwC index predict inflation fall at back the of government’ s target 34 points highertothan thetostart the pandemic. UKof 2% over the course of 2019. However, sales volumes business confidence in the service and manufacturing sectors remain low,strongest down 2.9% thesince North East in the2013 twelve was at its levelacross in April November months to June compared to a year earlier.theAfter a brief (IHS Markit). The latest forecasts expect UK economy reprieve summer the level number of mortgage to returnover to itsthe pre-pandemic by the summer of approvals across the UK has also slowed. anticipated. 2022, six months quicker than previously
Unemployment is setacross to peak at 6.5%, lower House price growth much of theconsiderably UK is slowing. than earlier forecasts of 11.9% (OBR). Interest rates remain However across the North East price growth has remained low and although mortgage approvals dipped slightly stable. Annual house price growth in the year to August (UK in April theirunchanged lowest level since last August, in excess a year earlier. Across the HPI) wasto2.9%, from of 82,700 loansannual wereprice approved, over thanthe prime market growth was20% just higher 0.5% over the long past year.term (5-year) monthly average (Dataloft, Bank of England). The extension of the stamp duty holiday and the introduction on April 1st of 95% government-backed BUDGET WINNERS AND LOSERS mortgages were welcomed by the property sector. Housebuilders and first-time buyers were the main real estate beneficiaries of the Autumn Budget. As the RECORD-BREAKING government aims to meet its ambitious 300,000 new homes per yearis target, a rangethe ofbusiest initiatives were announced. Spring traditionally time of the year for the Additional monies million for records. the Housing housing market andtotalling 2021 is£500 already setting In to deliver 650,000 new homes, new Investment Fund March, more than 190,000 property sales were recorded partnerships Housing Associations, removal of thehighs and mortgagewith lending exceeded £35.6 billion, record revenue cap for local councils and a business-backed according to HMRC and Bank of England respectively. guarantee scheme for SME builders are all in the pipeline. Demand levels in March were 34% higher year-on-year As too is large-scale infrastructure investment and moves (Zoopla) and 23% of homes were sold ‘sale agreed’ withinto reinvigorate the high street, with proposals to allow one week (Rightmove). The Royal Institute of Chartered conversion of unused retail units to residential and changes to business rates relief for small businesses.
Surveyors report the sales rate per surveyor in March was at its highest level since of 2014, with thethe salesbe extended until the the summer end of March 2023, with value of to-stock ratio at its strongest in over 17 years. Momentum the loan subject to a new regional cap. Across the North continued East theinto capApril, will beRightmove £186,100.reporting Based onproperties an analysisselling of new faster in the first two weeks than at any point its history. build property sales over the past year just in under half (49%) Although is on rise, this first-time is failing tobuyers. keep would valuation have beenactivity available to the prospective pace with demand, resulting in strengthened price growth. 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 FUTURE DIRECTION shared property since 22nd November 2017 will also be Annual price growth across the UK is at its able property to claim the relief retrospectively. strongest in over six years, with price growth in the North The government is also going to consult on reforms to East currently 9%, compared to 2% a year ago (UKHPI). lettings relief which looks set to impact on many so-called Nationwide report average prices in the UK have risen 2.1% ‘accidental’ landlords. Non-resident buyers will face a 1% between March and April, the largest month-on-month additional SDLT surcharge over and above all other costs. increase recorded since February 2004. Agents are reporting Although this is yet another tax rise, it is less than the 3% theindicated strongestbysentiment towards price growth between the government earlier this autumn. April and June since the summer of 2015 (RICS). Premium markets are currently outperforming the general market; THE VALUE OF inPRIME eight out of ten regions England and Wales are seeing growth of over 10%. HM Treasury netted £105 million in stamp duty receipts (SDLT) from the North East in the year to the end of
March 2018,MARKETS up 10.2% on a year previously, aided by a rise THE PRIME in sales volumes of 2.3%. Just under one quarter (24%) of Prime property growthtointhe thepurchase East Midlands is currently receipts wereprice attributed of additional Prime propertywith price growth the North is currently £35 millioninraised from East the 3% additional properties, 7.3%, ago. Acrosstaxation the North levysignificantly alone. Justhigher underthan 15%aofyear all residential receipts Eastwere the average pricetoofproperties a prime property is just over attributable purchased for over £500,000. £500,000, with prices highest in Durham and Newcastle. Higher-value homes have proved popular in recent months. The average price for prime market property exceeds In England, more than 54,000 homes sold for over £500,000 £500,000 in two areas across the North East: Newcastle during the first three months of 2021, the highest quarterly and Durham. The prime markets across South Shields and figure ever recorded. These buyers have benefitted from a Bishop Auckland are currently experiencing the highest level £15,000 saving, thanks to the stamp duty holiday (HMRC). of price growth; average prices of prime property have risen by 13% and 7% respectively over the past year.
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 PREMIUM MARKETS I NORTH EAST I 3
P R E MRIEUGMI O MNAARLK E T S T OP ON 5% PREM IU M5 % M ABRYK ERTEG S : I TOP
£376,000 £376,000 £501,573 £501,573 +7.3% +7.3% £247 £247
£473,000 £473,000 £474,000 £641,792 £641,437 £641,792 +10.8% +10.9% +10.8% £319 £319 £319
£525,000 £525,000 £525,000 £693,912 £693,912 £693,912 +10.3% +10.3% +11.3% £335 £335 £335
£482,000 £481,000 £630,387 £630,186 +10.2% +10.2% £291 £291
£419,000 £419,000 £546,274 £546,274 +10.8% +10.8% £285 £285
£686,000 £686,000 £938,080 £938,080 +15.3% +15.3% £435 £435
44 II PREMIUM EAST PREMIUM MARKETS MARKETS II NORTH NATIONAL
£460,000 £460,000 £460,000 £610,643 £610,643 £610,643 +10.3% +11.1% +10.3% £299 £299 £299
£750,000 £750,000 £1,007,650 £1,007,650 +10.0% +10.0% £483 £483
£905,000 £905,000 £904,000 £1,302,081 £1,302,081 £1,301,890 +17.2% +11.1% +17.2% £517 £517 £501
£1,550,000 £1,550,000 £2,508,438 £2,508,438 +6.4% +6.4% £1,180 £1,180
TOP 5% N O R TH E A S T P R EM I U M M A R K E T
£424,000 £580,641 +6% £274
£378,000 £486,384 +8% £253
£282,000 £361,521 +10% £189
£330,000 £413,034 –2% £265
£295,000 £362,830 +2% £163
£450,000 £608,341 +14% £270
£240,000 £300,050 +4% £171
£342,000 £446,025 +16% £204
£350,000 £466,185 +13% £231 £350,000 £449,934 0% £222
£350,000 £493,251 +7% £221 PREMIUM MARKETS I NORTH EAST I 5
TOP 5% N O R TH E A S T P R EM I U M M A R K E T
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.
NORTH EAST
10%
8%
6%
4%
2%
0% APR 2020
MAY 2020
JUN 2020
JUL 2020
AUG 2020
SEP 2020
OCT 2020
NOV 2020
DEC 2020
JAN 2021
FEB 2021
MAR 2021
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.
NORTH EAST
£320
£280 £240
£247
£255
£247
£225 £160
£80
0 FLAT/APARTMENT
TERRACED
SEMI-DETACHED
DETACHED
ALL PROPERTY Source: Dataloft, Land Registry
6 I PREMIUM MARKETS I NORTH EAST
MAINSTREAM N O R TH E A S T M A I N S T R EA M M A R K E T
ALL PROPERTIES SOLD ACROSS THE REGION
Chart shows a rolling 12-month change in transactions compared to the previous 12-month period. PLEASE NOTE: Caution should be taken when viewing this chart as figures may show an exaggerated decline due to the closure of the market April to June 2020. Housing market demand remains strong; the HMRC report sales in March 2021 were the highest monthly figure ever recorded.
Transactions
NORTH EAST
Average sales price
0%
-10%
-20%
-30%
-40% MAR 2020
APR 2020
MAY 2020
JUN 2020
JUL 2020
AUG 2020
SEP 2020
OCT 2020
NOV 2020
DEC 2020
JAN 2021
FEB 2021
Source: Dataloft, Land Registry
BY PROPERTY TYPE OVER THE LAST 12 MONTHS OF ALL PROPERTY SALES
NORTH EAST
Average price paid per square foot for all property transactions.
£240
£197
£180
£151 £120
£134
£130 £98
£60
0 FLAT/APARTMENT
TERRACED
SEMI-DETACHED
DETACHED
ALL PROPERTY Source: Dataloft, Land Registry
PREMIUM MARKETS I NORTH EAST I 7
KEY STATS N O R TH E A S T
£128,603 £376,000 £501,573
£86,254 £235,667 £299,449
£90,274 £279,825 £367,584
£138,113 £293,600 £393,470
£256,536 £549,997 £700,123
£133,687 £384,683 £510,713
T: +44 (0)207 079 1515 E: parklane@fineandcountry.com fineandcountry.com
Disclaimer :This repor t is produced for general information only.Whilst ever y effor t has been made to ensure the accuracy of this publication, Dataloft Ltd accepts no liability for any loss or damage of any nature arising from its use or from any changes made to Dataloft content by Inform users. Reproduction of all or par t of the repor t in any form is prohibited without written permission from Dataloft Ltd. Repor t edited by Inform user and published on 04-05-2021.
Please note, HM Land Registry transaction figures since March are lower than usual due to the impact of Covid-19. They are likely to be revised upward. dataloft.co.uk