F&C Regional Marketing Reports February 2022 - London

FEBRUARY 2022

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

KEY STATS G R E A TE R L O N D O N

£1,500,000

£2,414,000

-3.30%

£1,134

£12.2bn

9,862

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 GREATER LONDON

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 remain low, down 9.6% across London in theinterest. twelve 20,000 property sales priced £1 million or more were completed, months to June compared to a year earlier. After a brief more than in any year since Land Registry records began. With reprieve over the summer the number of mortgage travel corridors forhas much the summer and the autumn, approvals across open 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 with across price England have been 2% nonannual prices across London currently lower than a year resident stamp duty land tax since its introduction in April ago. Annual house price growth in the year to August (UK 2021. A third of all taxation-liable purchases in the final quarter HPI) was -0.2%, down from 3.2% a year earlier. Across the of 2021 were subject to the additional 3% higher rate additional prime market annual price growth has remained positive. 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 £520,000, the toconstraining business rates reliefpipeline. for smallAtbusinesses.

average price of a property in London is 8% more expensive than at the start of the pandemic. In monetary terms, this is equivalent to a rise of just over £37,000 (Dataloft, UK HPI). be extended until the end of March 2023, with the value of the loan subject to a new regional cap. Unlike all other Houses remain a popular choice, but with an increase in regions of England, the cap in London will remain unchanged international travel and a return to the office at least part-time at £600,000. Based on an analysis of new build property for many, the apartment market is also seeing a resurgence of sales across the Capital over the past year just under twointerest. Relative affordability is an increasingly important thirds (64%) would have been available to prospective firstconcern, and it is perhaps no surprise that it is locations in the time buyers. The SDLT relief introduced for first-time North West, East Midlands and Yorkshire and the Humber that buyers in the 2017 Budget will also be extended to all those are who currently experiencing the strongestproperty. levels of property price purchase a shared-ownership Those who inflation (Zoopla). nd have purchased a shared property since 22 November 2017 will also be able to claim the relief retrospectively.

ECONOMIC CHANGE

The government is also going to consult on reforms to lettings relief which looks settotopre-Covid impact onlevels, many so-called As the UK economy tracks back ‘accidental’ landlords.

Non-resident buyers will face a 1% expectations for growth in 2022 remain positive, despite over weeks. and above other costs. additional forecasts beingSDLT paredsurcharge back in recent Theall IMF predict the is yet another tax rise, is less thanofthe UK Although economy this will strengthen by 4.7% overit the course this3% by theClub government earlierinward this autumn. year;indicated the EY ITEM by 4.9%. Strong investment and

a robust jobs market are key factors supporting the growth.

THE VALUE OF PRIME

Savings accumulated by many households during the COVID-19 HM Treasury nettedlikely just to over £3.6 billion stampofduty lockdowns are thought help subdue theinshock rising receipts (SDLT) from London in the year to the end of energy, food and fuel prices. Inflation is set to reach 7% or higher up 6.6% onthat a year previously, fall of thisMarch spring, 2018, with predictions the base rate ofdespite interestawill 6.0% in sales volumes.

Over one quarter (27%) of receipts climb to 1% over the course of the year. Although this would be were attributed to the purchase of additional properties, the highest rate since March 2009, it is still low by historical with £585 million raised from the 3% additional levy alone. standards. Rising costs may well act as soft brake on the Over half of all residential receipts were attributable to property market, but with buyer demand continuing to outpace properties purchased for over £1 million, 35% to properties supply, pressure on prices looks set to remain at least in the purchased for over £2 million. short term.

At just shy of £2.5 million, the average price for prime ¹ Dataloft, Bank of England,across HMRC London is over twice that of the market property UK's second most expensive region, the South East. ² Dataloft, HMRC, Stats Wales

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 GREATER LONDON 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 GREATER LONDON

£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% G R E A TE R L O N D O N P R E M I U M M A R K E T

£8,650,000 £13,986,749 –13% £3,374

£1,850,000 £2,472,019 –1% £1,212

£7,510,000 £11,783,705 +11% £2,549

£1,590,000 £2,454,012 +1% £929

£1,070,000 £1,346,769 +10% £1,081

£2,220,000 £2,749,757 –14% £1,181

PREMIUM MARKETS I GREATER LONDON I 5

TOP 5% G R E A TE R L O N D O N P R E M 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.

GREATER LONDON

10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 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.

GREATER LONDON

£1,600

£1353

£1,200

£1249 £1136

£1134

DETACHED

ALL PROPERTY

£1006 £800

£400

0 FLAT/APARTMENT

TERRACED

SEMI-DETACHED

Source: Dataloft, Land Registry

6 I PREMIUM MARKETS I GREATER LONDON

MAINSTREAM G R E A TE R L O N D O N M A I N S T R EA M M A R K ET

ALL PROPERTIES SOLD ACROSS THE REGION

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

GREATER LONDON

Transactions

40%

Average sales price

20%

PLEASE NOTE: Caution should be taken when viewing this chart due to the continued delay in recording Land Registry sales.

0%

-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

GREATER LONDON

Average price paid per square foot for all property transactions.

£800

£600

£636 £577

£539

£588

£596

DETACHED

ALL PROPERTY

£400

£200

0 FLAT/APARTMENT

TERRACED

SEMI-DETACHED

Source: Dataloft, Land Registry

PREMIUM MARKETS I GREATER LONDON I 7

KEY STATS G R E A TE R L O N D O N

£533,014 £1,500,000 £2,414,000

£431,908 £1,067,483 £1,676,686

£598,128 £1,649,386 £2,678,302

£619,885 £1,513,153 £2,379,620

£952,503 £3,086,452 £4,931,235

£634,572 £1,758,492 £2,910,484

T: +44 (0)207 079 1515 E: parklane@fineandcountry.com fineandcountry.com

dataloft.co.uk

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: the London residential property market, particularly the more central parts have been disproportionately affected by the Covid pandemic.

Transactions in prime central London are lower, with fewer high value sales.

There are still outstanding transactions which have not yet appeared on Land Registry.