AUGUST 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
£390,000
£515,707
10.45%
£247
£896m
41
LATEST DATA
QUARTERLY CHANGE
ANNUAL CHANGE
81,338
-4.6%
98.2%
RESIDENTIAL TRANSACTIONS (MTH)
198,240
-3.8%
219%
GROSS MORTGAGE LENDING (MTH)
£43.8 bn
4.2%
169%
NEW HOME STARTS (QT)
37,190
23.7%
36.0%
NEW HOME COMPLETIONS (QT)
36,190
-16.7%
24.4%
MORTGAGE APPROVALS (MTH)
2 I PREMIUM MARKETS I NORTH EAST
MARKET OVERVIEW B U S I E SA T UMTAURMKNE TS IHA N D A ED S ECADE Brexit andsixthe budgetofhave headlines over the pastthe quar ter, andmarket. while the The first months 2021dominated has seen records broken across housing With latter provided few fireworks for to theoutstrip real estate market, the deal or no deal demand for property continuing available supply, mortgage ratesquestion remaining continues to linger. Rhetoric hashigher been more positive in recent weeks; now that all eyes arewill on low and consumer confidence than pre-pandemic levels, it is likely 2021 the EUthe summit in mid-November. uncer tainty,is annual housetoprice growthover prove busiest market in over aDespite decade.the Price growth anticipated moderate remains positive across England and Wales, except London, although transaction levels the coming months. remain muted. DOUBLE-DIGIT PRICE RISES WATCHING AND WAITING The average price of a property across the UK is currently
10% higher than a year ago, standing £254,624. Price There was positive economic news inatthe Budget: eight growth at its strongest September 2007,since significantly years of iseconomic growth,since 3.3 million new jobs 2010 higher than the 1.1%forecast recorded year and ago wage (UKHPI). Average with 800,000 more by a2023, growth at price growth North East is currently 11.8%, up from its highest levelininthe nearly a decade. Independent forecasts from Office Responsibility (OBR) also -0.7%the a year ago.forABudget shortage of supply and high demand predict inflation to fall back to the government’ s target of have underpinned growth in 2021 to date, with new record 2% over the course of 2019. However, sales volumes asking prices across all regions of the UK (Rightmove). The remain low,a down 2.9% across North Eastininthe thewake twelve desire for lifestyle change andthe more space months to June compared to a year earlier. Aftersaw a brief of the pandemic, coupled with taxation savings, an reprieve the summer thesales number of mortgage estimatedover 880,000 property complete in the first six approvals the Close UK hastoalso slowed. months ofacross the year. 200,000 sales completed in June alone, as the first phase of the stamp holiday came House price growth across much of the UKduty is slowing. to an end in England and the Land Transaction Tax holiday However across the North East price growth has remained ended in Wales (HMRC). stable. Annual house price growth in the year to August (UK HPI) was 2.9%, unchanged from a year earlier. Across the prime market annualREMAIN price growth was just 0.5% over the CONDITIONS FAVOURABLE past year. Buyer demand remains considerably higher than a year ago (Zoopla and Rightmove). In excess of 81,000 new mortgages BUDGET WINNERS AND LOSERS were approved in June (Bank of England), over 20% higher than the long- term June average. Encouragingly, thereal majority Housebuilders and first-time buyers were the main estate beneficiaries the Autumn Budget. thestamp of purchasers who of missed the original 30thAs June government meet its ambitious new homes duty deadlineaims looktoset to continue with300,000 their purchases per year target, range ofRightmove initiatives were announced. (Rightmove). Ata 38 days, report the average time Additional monies totalling £500 million for taken to sell a property (from marketing to the soldHousing subject to deliver 650,000 new homes, new Investment Fund to contract) is almost four weeks shorter than at the start partnerships with removal of thehas of 2021. While theHousing flow of Associations, new supply to the market revenue cap for local councils and a business-backed started to return to more ‘normal’ levels, there remains a guarantee for SME builders properties are all in the shortfall inscheme the number of available topipeline. purchase. As too is large-scale infrastructure investment and Consumer confidence is on an upward trajectory, moves ahead to reinvigorate the high street, with proposals to allow of its pre-pandemic level, with the GfK index indicating conversion of unused retail units to residential and changes consumers are considerably more confident in making a to business rates relief for small businesses. major purchase. 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
LOOKING AHEAD
Thebemajority of agents anticipate property prices extended until the end of March 2023, withwill therise value of overthe theloan next twelve months. However, with a sizeable subject to a new regional cap. Across the North proportion who missed theon30th June deadline East the of cappurchasers will be £186,100. Based an analysis of new likely to renegotiate on price (25% Rightmove, 42% build property sales over the past year just underDataloft half (49%) subscriber poll),been thereavailable may welltobe a brake onfirst-time the morebuyers. would have prospective dramatic increases seen in recent months. Indeed, the2017 The SDLT relief introduced for first-time buyersboth in the Halifax and Nationwide point to a slight fall in price monthBudget will also be extended to all those who purchase a on-month in June andproperty. July. The direction of have the market in a shared-ownership Those who purchased nd November theshared final quarter willsince most22 likely depend on2017 the impact property will alsoofbe theable removal of government support packages which have to claim the relief retrospectively. supported the labour market over the past 18 months. The government is also going to consult on reforms to However, despite prices rising, mortgage payments for the lettings relief which looks set to impact on many so-called majority of purchasers have not followed suit. Mortgage rates ‘accidental’ landlords. Non-resident buyers will face a 1% are close to an all-time low, and affordability matrices remain additional SDLT surcharge over and above all other costs. on par with the long-term average. Sales volumes for 2021 are Although this is yet another tax rise, it is less than the 3% predicted to be in the region of 1.5 million, making the market indicated by the government earlier this autumn. the busiest in over a decade.
THE VALUE OF PRIME THE PRIME MARKETS HM Treasury netted £105 million in stamp duty receipts Larger properties have proved most sought-after (SDLT) from the North Eastthe in the year to the endtoofdate in 2021 as the search for space has helped fuel price growth. March 2018, up 10.2% on a year previously, aided by a rise Rightmove report a of 39% increase in salesone forquarter larger homes, in sales volumes 2.3%. Just under (24%) of those with four more bedrooms, against aof15% fall in stock receipts wereorattributed to the purchase additional coming to the market the firstraised half of 2021 to with £35in million from thecompared 3% additional properties, 2019. Prime property price growth the North East isreceipts 10.4%, levy alone. Just under 15% of all in residential taxation on were par with the average across England and Wales. The price attributable to properties purchased for over £500,000. threshold for a premium market property in the North East is currently £390,000. Forty-one properties have sold for The average price for prime market property exceeds £1 million or more in the past 12 months. £500,000 in two areas across the North East: Newcastle and Durham. The prime markets across South Shields and Bishop Auckland are currently experiencing the highest level of price growth; average prices of prime property have risen by 13% and 7% respectively over the past year.
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
£390,000 £390,000 £515,707 £515,707 +10.4% +10.4% £247 £247
£495,000 £495,000 £671,747 £671,747 +15.9% +15.9% £322 £322
£550,000 £550,000 £720,956 £720,956 +15.6% +15.6% £339 £339
£500,000 £500,000 £654,805 £654,805 +15.2% +15.2% £294 £294
£437,000 £437,000 £567,062 £567,062 +13.5% +13.5% +13.6% £288 £288
£705,000 £705,000 £963,070 £963,070 +18.4% +18.4% £435 £435
44 II PREMIUM EAST PREMIUM MARKETS MARKETS II NORTH NATIONAL
£482,000 £482,000 £483,000 £645,805 £646,251 £645,805 +15.8% +15.8% £307 £307
£771,000 £771,000 £1,043,648 £1,043,648 +12.8% +12.8% £488 £488
£916,000 £916,000 £1,307,640 £1,307,640 +15.1% +15.1% £515 £515
£1,500,000 £1,500,000 £2,418,692 £2,418,692 –0.1% –0.1% £1,135 £1,135
TOP 5% N O R TH E A S T P R EM I U M M A R K E T
£445,000 £600,420 +9% £271
£417,000 £526,087 +23% £262
£295,000 £373,465 +11% £203
£367,000 £465,880 +12% £257
£295,000 £366,492 0% £172
£451,000 £591,084 +13% £268
£264,000 £337,004 +19% £177
£350,000 £457,629 +12% £203
£372,000 £499,955 +22% £237 £365,000 £463,658 +6% £225
£391,000 £512,525 +12% £234 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
12% 10% 8% 6% 4% 2% 0% JUL 2020
AUG 2020
SEP 2020
OCT 2020
NOV 2020
DEC 2020
JAN 2021
FEB 2021
MAR 2021
APR 2021
MAY 2021
JUN 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
£240
£271
£251
£260
£230
£247
£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, with the HMRC reporting 198,240 sales in June 2021.
NORTH EAST
Transactions
5%
Average sales price
0% -5% -10% -15% -20% -25% JUN 2020
JUL 2020
AUG 2020
SEP 2020
OCT 2020
NOV 2020
DEC 2020
JAN 2021
FEB 2021
MAR 2021
APR 2021
MAY 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
£201
£180
£152 £120
£137
£132 £101
£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
£131,974 £390,000 £515,707
£89,362 £250,000 £319,494
£92,735 £290,354 £384,238
£140,273 £309,991 £410,683
£262,920 £552,062 £731,771
£137,112 £399,992 £527,650
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 02-08-2021.
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