F&C Regional Marketing Reports February 2022 - East of England

FEBRUARY 2022

E A S T O F E N G L A N D M A R K E T U P D AT E

KEY STATS E AS T O F E N G LA N D

£783,000

£1,069,604

8.39%

£510

£5.51bn

1,918

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 OF ENGLAND

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 6.2% across the East of England 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 House growth acrosssubject much to of the the additional UK is slowing, and across price England have been 2% nonthe East of England is no exception.

Annual house price resident stamp duty land tax since its introduction in April growth in the year to August (UK HPI) was 1.6%, down 2021. A third of all taxation-liable purchases in the final quarter from 6.0% a year earlier. Across the prime market, annual of 2021 were subject to the additional 3% higher rate additional price growth was 1.4% over the past year. dwellings tax.

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

Whilefor there indications new supply will enter guarantee scheme SMEare builders are all in the pipeline. the market shortly with new home valuation requests on the As too is large-scale infrastructure investment and moves to rise, a significant proportion of properties on surveyor reinvigorate the high street, with proposals to allow books are ‘sold subject to contract’.

Continued lack of and supply is conversion of unused retail units to residential changes the sales just below £337,000, the toconstraining business rates reliefpipeline. for smallAtbusinesses.

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

average price of a property in the East of England is 17% more expensive than at the start of the pandemic. In monetary terms, this is equivalent to a rise of close to £49,000 (Dataloft, UK HPI). be extended until the end of March 2023, with the value of the loan subject to a new regional cap. Across the East of Houses remain a popular choice, but with an increase in England the cap will be £407,400. Based on analysis of new international travel and a return to the office at least part-time build property sales over the past year, 76% would have for many, the apartment market is also seeing a resurgence of qualified under the new cap. The SDLT relief introduced for interest. Relative affordability is an increasingly important first-time buyers in the 2017 Budget will also be extended concern, and it is perhaps no surprise that it is locations in the to all those who purchase a shared-ownership property.

North West, East Midlands and Yorkshire and the Humber that Those who have purchased a shared property since are 22 currently experiencing levels property price nd November 2017 the will strongest also be able to of claim the relief inflation (Zoopla). retrospectively.

The government is also going to consult on reforms to ECONOMIC CHANGE

lettings relief which looks set to impact on many so-called ‘accidental’ landlords.

Non-resident buyerslevels, will face a 1% As the UK economy tracks back to pre-Covid additional SDLT surcharge over and above other costs. expectations for growth in 2022 remain positive,alldespite the 3% Although is yetback another tax weeks. rise, it isThe lessIMF thanpredict forecasts beingthis pared in recent the government earlier UK indicated economy by willthe strengthen by 4.7% overthis theautumn. course of this year; the EY ITEM Club by 4.9%. Strong inward investment and a robust market OF are key factors supporting the growth.

THEjobs VALUE PRIME HM accumulated Treasury netted just over £1 billion in stamp duty Savings by many households during the COVID-19 receipts (SDLT) across the East of England in the to lockdowns are thought likely to help subdue the shock year of rising the end of March 2018, up 8.5% on a year previously.

This energy, food and fuel prices. Inflation is set to reach 7% or higher despite a fall in salesthat volumes of rate 1.6%.of One fifthwill of thiswas spring, with predictions the base interest receipts were attributed to the purchase of additional climb to 1% over the course of the year. Although this would be properties, with £200 million raised from the 3% additional the highest rate since March 2009, it is still low by historical levy alone. Virtually 50% of all residential taxation receipts standards. Rising costs may well act as soft brake on the were attributable to properties purchased for over property market, but with buyer demand continuing to outpace £500,000, 17% were from properties purchased for over supply, pressure on prices looks set to remain at least in the £1 million. short term.

The average price for prime market property exceeds £1 ¹ Dataloft, Bank England, HMRC million in of two of the main cities/towns across the East of England: Cambridge and Watford. The prime market across ² Dataloft, HMRC, Stats Wales 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

£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 OF ENGLAND

£783,000 £1,069,604 +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 O F E N G LA N D PR E MI UM MA R KE T

£451,000 £617,089 +22% £280

£595,000 £764,908 –5% £368 £625,000 £795,414 +15% £334

£871,000 £1,181,457 +9% £501

£650,000 £849,833 +11% £388

£588,000 £740,482 +5% £374

£1,310,000 £1,740,211 +5% £629

£653,000 £835,475 +7% £375 £776,000 £1,002,382 +8% £441

£709,000 £884,769 +10% £425

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

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 OF ENGLAND

16% 14% 12% 10% 8% 6% 4% 2% 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 OF ENGLAND

£600

£542

£540

TERRACED

SEMI-DETACHED

£504

£450

£560 £510

£300

£150

0 FLAT/APARTMENT

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

ALL PROPERTIES SOLD ACROSS THE REGION

Chart shows a rolling 12-month change in transactions compared to the previous 12-month period.

EAST OF ENGLAND

Transactions

40%

Average sales price

30% 20%

PLEASE NOTE: Caution should be taken when viewing this chart due to the continued delay in recording Land Registry sales. HMRC report sales volumes are significantly higher year on year.

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 OF ENGLAND

Average price paid per square foot for all property transactions.

£400

£300

£319

£325

FLAT/APARTMENT

TERRACED

£340

£340

£333

SEMI-DETACHED

DETACHED

ALL PROPERTY

£200

£100

0

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

£325,071 £783,000 £1,069,604

£198,282 £408,073 £527,467

£278,119 £555,906 £697,421

£326,331 £674,921 £830,454

£452,315 £1,100,000 £1,482,616

£349,813 £814,118 £1,113,915

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