F&C Regional Marketing Reports February 2022 - East Midlands

FEBRUARY 2022

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

KEY STATS E AS T M ID LAN D S

£515,000

£675,592

9.55%

£303

£2.15bn

242

LATEST DATA

QUARTERLY CHANGE

ANNUAL CHANGE

71,015

-7.1%

-29.9%

RESIDENTIAL TRANSACTIONS (MTH)

100,110

-18.5%

-20.0%

GROSS MORTGAGE LENDING (MTH)

£21.7 bn

-7.5%

-10.8%

NEW HOME STARTS (QT)

38,070

1.3%

23.4%

NEW HOME COMPLETIONS (QT)

32,930

-9.2%

-4.5%

MORTGAGE APPROVALS (MTH)

2 I PREMIUM MARKETS I EAST MIDLANDS

MARKET OVERVIEW NF SCHA SE WAIU NTDUSMO H ADNEG Brexit the budget havetodominated headlines pasttowards quar ter,the andspring. while the Buyer and demand continues outpace new supply over as wethe head latter provided fewdrivers fireworks for the realand estate market, deal or no deal question The fundamental of more space a change ofthe lifestyle, aided by hybrid continues to linger.However Rhetoric economic has been more positive recent weeks; all the eyesmarket are on working, remain. headwinds areinblowing and maynow calm the EU year summit in mid-November. Despite the uncer tainty, annual house price growth as the progresses. remains positive across England and Wales, except London, although transaction levels remain muted.

A YEAR LIKE NO OTHER

With mortgage approvals and lending at levels not seen since

WATCHING AND WAITING 2007, and close to 1.5 million properties changing hands¹, 2021

provedwas a year like no other fornews the housing market. eight Even with There positive economic in the Budget: over 560,000 sales excluded from taxation due to the stamp years of economic growth, 3.3 million new jobs since 2010 duty holiday in England and an estimated 60% of purchases with 800,000 more forecast by 2023, and wage growth at in benefitting from aareduction in taxation (January-June), itsWales highest level in nearly decade. Independent forecasts £9.5 billion was collected in residential tax (OBR) receipts.also This was up from the Office for Budget Responsibility by overinflation 50% onto 2020 12% on 2019². s target of predict fall and backa to therise government’ 2% over the course of 2019. However, sales volumes Prime market properties attracted significant interest.

20,000 remain low, down 3.8% across the East Midlands in the property sales priced £1 million or more were completed, twelve months to June compared to a year earlier. After a morereprieve than in any Landthe Registry records began. With brief overyear thesince summer number of mortgage travel corridors forhas much the summer and the autumn, approvals acrossopen the UK alsoofslowed. the UK has seen a return of overseas buyers; 8,500 purchases While growth to across much of the UK is acrossannual Englandhouse have price been subject the additional 2% nonslowing, the East Midlands is an exception.

Annual house resident stamp duty land tax since its introduction in April price growth in the year to August (UK HPI) was 6.5%, up 2021. A third of all taxation-liable purchases in the final quarter from 5.9% a year earlier and significantly higher than the UK of 2021 were subject to the additional 3% higher rate additional average of 3.2%. Across the prime market annual price dwellings tax. growth was 1.7% over the past year.

BUDGET WINNERS IMBALANCE AND LOSERS DEMAND-SUPPLY Housebuilders and first-time buyers were the main real A demand-supply imbalance epitomised the market in 2021, estate beneficiaries of the Autumn Budget. As the underpinning property price growth. 2022 has started in a government aims to meet its ambitious 300,000 new homes similar At 11.2 %, Nationwide price growth per yearvein. target, a range of initiativesreport were annual announced. in the year to January represents the strongest start to a year Additional monies totalling £500 million for the Housing since 2005.Fund The average asking price new of a property coming to Investment to deliver 650,000 homes, new market registered its strongest rate of growth since partnerships with Housing Associations, removal of May the 2016 (Rightmove).

While there are indications new supply revenue cap for local councils and a business-backedwill enter the marketscheme shortlyfor with newbuilders home valuation on the guarantee SME are all inrequests the pipeline. rise, a significant proportion of properties on surveyor books As too is large-scale infrastructure investment and moves to are ‘sold subject to contract’.

Continued lacktoofallow supply is reinvigorate the high street, with proposals constrainingofthe sales pipeline.

At to justresidential below £230,000, the conversion unused retail units and changes to business rates relief for small businesses.

average price of a property in the East Midlands is 17% more expensive than at the start of the pandemic. In monetary terms, this is equivalent to a rise of just over £33,500 be extended until the end of March 2023, with the value of (Dataloft, UK HPI). the loan subject to a new regional cap. Across the East Midlands the cap will be £261,900. Based on an analysis of Houses remain a popular choice, but with an increase in new build property sales over the past year just over half international travel and a return to the office at least part-time (59%) would have been available to prospective first-time for many, the apartment market is also seeing a resurgence of buyers. The SDLT relief introduced for first-time buyers in interest. Relative affordability is an increasingly important the 2017 Budget will also be extended to all those who concern, and it is perhaps no surprise that it is locations in the purchase a shared-ownership property. Those who have North West, East Midlands and Yorkshire the Humber that nd November purchased a shared property since 22and 2017 are will currently experiencing the strongest levels of property price also be able to claim the relief retrospectively. inflation (Zoopla).

The government is also going to consult on reforms to lettings relief which looks set to impact on many so-called ECONOMIC CHANGE ‘accidental’ landlords. Non-resident buyers will face a 1% additional SDLT surcharge and abovelevels, all other costs.

As the UK economy tracks backover to pre-Covid rise,positive, it is less despite than the 3% Although for thisgrowth is yet another expectations in 2022 tax remain indicated bypared the government earlier thisThe autumn. forecasts being back in recent weeks.

IMF predict the UK economy will strengthen by 4.7% over the course of this year;THE the EY ITEM Club 4.9%. Strong inward investment and VALUE OFbyPRIME a robust jobs market are key factors supporting the growth.

HM Treasury netted £330 million in stamp duty receipts (SDLT) from the by East Midlands in theduring year to end of Savings accumulated many households thethe COVID-19 March 2018, up 10% on a year previously, aided by rise in lockdowns are thought likely to help subdue the shock ofarising salesfood volumes of 2.1%. over one (22%)7% of or receipts energy, and fuel prices.Just Inflation is setfifth to reach higher were attributed to the purchase of additional properties, this spring, with predictions that the base rate of interest will with £100 million raised from the 3% additional levy alone. climb to 1% over the course of the year. Although this would be Just under one quarter of all residential taxation receipts the highest rate since March 2009, it is still low by historical were attributable to properties purchased for over standards. Rising costs may well act as soft brake on the £500,000, 6.1% to properties purchased for over £1 million. property market, but with buyer demand continuing to outpace supply, prices to remain at least in the Thepressure average on price for looks primeset market property exceeds short term. in just one of the areas across the East Midlands, £600,000 Northampton. The prime markets across Leicester and currently experiencing the highest level of Northampton are HMRC ¹ Dataloft, Bank of England, price HMRC, growth, average ² Dataloft, Stats Wales prices of prime property have risen by 7% and 5% 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 EAST MIDLANDS I 3

PREMIUM MARKETS T OP 5 % B Y R EG I O N

£400,000 £541,478 +9.6% £261

£507,000 £706,845 +13.5% £338

£498,000 £680,181 +14.6% £322

£566,000 £759,175 +12.5% £361

£515,000 £675,592 +9.5% £303

£455,000 £593,700 +12.0% £298

£718,000 £976,599 +8.4% £449

4 I PREMIUM MARKETS I EAST MIDLANDS

£784,000 £1,069,604 £1,069,919 +8.4% £510

£927,000 £1,340,020 +7.4% £548

£1,500,000 £2,414,000 –3.3% £1,134

TOP 5% E AS T M ID LAN D S PR E MIU M MA R KE T

£435,000 £568,585 +23% £257

£485,000 £635,328 +14% £301

£461,000 £586,886 +10% £240

£545,000 £726,908 +12% £324

£481,000 £629,956 +7% £295

£537,000 £696,679 +4% £312

£530,000 £708,735 +14% £299

£525,000 £673,127 +6% £318

£580,000 £746,507 +10% £336

PREMIUM MARKETS I EAST MIDLANDS I 5

TOP 5% E AS T M ID LAN D S PR E MIU M MA R KE 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.

EAST MIDLANDS

20%

15%

10%

5%

0% JAN 2021

FEB 2021

MAR 2021

APR 2021

MAY 2021

JUN 2021

JUL 2021

AUG 2021

SEP 2021

OCT 2021

NOV 2021

DEC 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.

EAST MIDLANDS

£400

£324

£300

£294

£285

£287

FLAT/APARTMENT

TERRACED

SEMI-DETACHED

£303

£200

£100

0 DETACHED

ALL PROPERTY Source: Dataloft, Land Registry

6 I PREMIUM MARKETS I EAST MIDLANDS

MAINSTREAM E AS T M ID LAN D S MA I N STR E AM MA RK 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 due to the continued delay in recording Land Registry sales.

EAST MIDLANDS

Transactions

20%

Average sales price

10%

0%

-10%

-20% DEC 2020

JAN 2021

FEB 2021

MAR 2021

APR 2021

MAY 2021

JUN 2021

JUL 2021

AUG 2021

SEP 2021

OCT 2021

NOV 2021

Source: Dataloft, Land Registry

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

EAST MIDLANDS

Average price paid per square foot for all property transactions.

£320

£240

£255 £220

£217 £160

£192

£185

FLAT/APARTMENT

TERRACED

£80

0 SEMI-DETACHED

DETACHED

ALL PROPERTY Source: Dataloft, Land Registry

PREMIUM MARKETS I EAST MIDLANDS I 7

KEY STATS E AS T M ID LAN D S

£217,663 £515,000 £675,592

£123,601 £263,514 £350,208

£159,316 £305,400 £394,642

£196,087 £350,001 £444,166

£320,276 £659,237 £856,324

£224,939 £523,944 £685,427

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 07-02-2022.

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