Webbers Fine and Country National Market Update

JANUARY 2020

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

KEY STATS E N G L A ND A N D WAL ES

£676,000

£998,159

-1.97%

£586

£46.3bn

14,483

LATEST DATA

QUARTERLY CHANGE

ANNUAL CHANGE

64,994

-1.7%

1.4%

RESIDENTIAL TRANSACTIONS

102,050

2.6%

1.9%

GROSS MORTGAGE LENDING

£22.4 bn

2.7%

1.2%

NEW HOME STARTS (QT)

32,180

12.2%

-8.6%

NEW HOME COMPLETIONS (QT)

32,840

-16.2%

14.6%

MORTGAGE APPROVALS

2 I PREMIUM MARKETS I NATIONAL

MARKET OVERVIEW T 2H0E1 8D A- WTH N EO YE F A WAD CAD A RN ETH T E WA SE Although the decade, festive season upon us, there is little 2019, seasonal cheer and ‘good will tovictory all’ 2020: a new a newisera.

After an eventful Boris Johnson’s election evident the political arena.Brexit BrexitDone”. continues to dominate headlines as all eyes sends a across clear message to “Get Political stability, the clarity and certainty await the finalboth outcome. theand conclusion, there are sure to be implications for will reassure buyersWhatever and sellers is likely to provide a welcome boost for the sterling the economy.

2018are draws to a close, are we across any closer to predicting what housingand market.

Property As prices expected to increase all regions over the we can expect in 2019? course of the year.

CHANGE OF MOOD GLIMMERS OF SEASONAL CHEER The financial markets reacted positively to the election victory.

The FTSE 250 posted highestacross daily rise a decade, while Throughout 2018 salesits volumes the in housing market the value of Sterling rose against both the US$ and the have struggled, thanks to the backdrop of lower buyer Euro, in the case thelevels latterofhitting its highest level since July 2016. demand andoflow consumer confidence.

However, Early indicators are that there has also been an uptick latest data from the Bank of England indicates mortgagein consumerinconfidence, the GfK trackerthan posting a three-point approvals October were 4% higher a year ago, while rise total in December, with a hit seven-point in how positively the value of lending its highestjump monthly figure since consumers the widerprior economy the nextofyear. introduction theWage the surge in see transactions to theover growth continues outpace inflation, although 60% of additional 3% SDLTtolevy in March 2016.and More sales took households risemonth over 2020 place across anticipate the UK in interest Octoberrates thanwill in any since(HIS/ July 2017, while Rightmove data shows properties 2018 Markit), economists currently predict the baseinrate willtoincrease date have taken days from the start of housing by just 0.25% to an 1%,average still lowofby61historic standards.

The marketing to being sold-subject-to-contract, day market is expected to gain impetus as springone approaches, a shorter than last year and an improvement on pent-up the 65 days period of certainty and stability set to release demand. witnessed A shortageinof2016. stock looks likely to underpin prices; Rightmove predict the price of property coming to the market will rise by Despite the rise in the UK base rate in the summer, 2% in 2020. mortgage interest rates remain low. UK Finance report that at 2.23% the current average mortgage interest rate is lower LOOKING BACK, LOOKING FORWARDS than the rate both five and ten years ago, 3.14% and 6.11% respectively. Adjusting for inflation, wages have risen over Thepast average of anews property continuedfinances. to rise over 2019, the year, price positive for household although rates of price appreciation have continued to ease. At 0.6% current annual price growth across England and Wales SENSE AND SENSIBILITY is at its lowest level in over seven years. There are however Sensible remainsgrowth crucial exceeds to achieving a sale. The regional pricing discrepancies, 3% across Wales and priceHumber, of a property fell by 1.7% November, average asking Yorkshire and the and indications areinthat the London the largest November fall since 2012 according to market is stabilising. While it is too early to say where the Rightmove, priceofgrowth has moderated market maywhile be inannual 2030, house an average independent forecasts throughout the year.

Annual house price growth across predict property prices will rise by 1.8% over 2020, withthe UK in the year to September 4.6% a compound growth of 16% bywas the 3.5%, end ofdown 2024,from slightly lower year according to achieved the official UKthe House Index.This will than ago, the 21% growth over pastPrice five years.

Average prices across London remain slightly lower a add an additional £37,000 to the average price of a than property currently feeling the brunt of Brexit year ago, the capital across England and Wales, with prices set to rise by over uncertainty. £50,000 in London.

Household growth has exceeded population growth over the past decade due in the main to changing demographics and Across the UK and prime the average price of property family structures, thismarkets, trend looks set to continue.

One of is down a fraction on a year ago.

However, across many the key Conservative manifesto pledges is to build 300,000 assetsnew 2018 has not momentous. themillion year tonew the private homes perproved year, with a target ofInone end of November the average price of gold has fallen by homes by 2025. The 2020s may well see ‘eco-homes’ at the over 1%, the stock market (FTSE 100) by 6%, while the S&P forefront of construction activity, the government pledging Global Luxury Index is 5.5% lower than a year ago, despite to support new homes that have lower energy bills, although fine wines and classic cars boasting small positive returns. there is no specific mention of zero-carbon homes as pledged Many commentators report evidence of pent-up demand by both Labour and the Liberal Democrats. Encouraging firstfor higher priced properties, with prospective vendors time buyers a crucial partthey of housing with Helpwaiting forremains more clarity before commitpolicy, to their to-Buy guaranteed until 2023, and proposals for new life-time purchase. mortgages. First-time buyers have equated to over half of all new homemover mortgage loans over the past year, according CRYSTAL to A data released byBALL UK Finance.

Unsurprisingly all current forecasts for 2019 are issued with a caveat relating a deal being brokered between the UK WINDOW OFtoOPPORTUNITY and the EU. The Governor of the Bank of England, Mark The uncertainty surrounding the UK’sthat departure fromofthe EU a noCarney, has reiterated his forecast in the event Brexit the impacted economy prime may fall by overand 8%the andLondon average hasdeal undoubtedly markets housemore pricesthan by up to 30%.

Currentofforecasts thefactor market most, the volatility sterling afrom major for investors Budget Responsibility point to prime employment levels forOffice overseas looking to purchase property continuing rise inannouncement 2019, along with average earnings, while in the UK. Thetolikely in the anticipated Spring inflation is predicted to edge back to the government’ s 2.0% Budget of a 3% additional stamp-duty levy for non-UK resident target.

This may well require a gradual rise in interest rates, purchasers, along with the gradual improvement in Sterling the base rate now. will rise although the current view is thatbuyers may well encourage discretionary to buy Theto just 1.5 – 1.75% by 2021. value of sterling ended the year up 9% against the Euro and up 10% against US$, compared year’s low.

Across thethe housing market, as to perthe 2018, many commentators expect the wider UK market to outperform London. An average of independent forecasts predicts price growth across the UK will be 2.2% during 2019. In comparison, those commentating on the London market anticipate 2019 may well prove another year of falling prices. Compound growth across the UK is anticipated to be in the region of 11% – 14% over the next five years.

Forecasts for London vary widely, from less than 5% to over 10%. Only time will tell which trajectory is more likely to be true.

PREMIUM MARKETS I NATIONAL I 3

REGIONAL P R E M I U M M A R K E T S : TOP 5 %

£350,000 £449,402 –1.2% £238

£414,000 £569,638 –0.3% £302

£406,000 £540,343 +0.1% £285

£470,000 £613,732 –1.8% £315

£433,000 £557,490 –0.6% £274

£380,000 £480,561 –1.0% £263

£587,000 £793,241 +0.4% £391

4 I PREMIUM MARKETS I NATIONAL

£684,000 £911,182 –0.8% £458

£794,000 £1,103,160 +0.4% £484

£1,400,000 £2,257,617 –5.9% £1,175

NATIONAL P R E M I U M M A R K E T S : TOP 5 %

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.

ENGLAND & WALES

0% -0.5% -1% -1.5% -2% -2.5% -3% -3.5% DEC 2018

JAN 2019

FEB 2019

MAR 2019

APR 2019

MAY 2019

JUN 2019

JUL 2019

AUG 2019

SEP 2019

OCT 2019

NOV 2019

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.

ENGLAND & WALES

£1,200

£1091 £900

£600

£642

£586 £497

£488

SEMI-DETACHED

DETACHED

£300

0 FLAT/APARTMENT

TERRACED

ALL PROPERTY Source: Dataloft, Land Registry

PREMIUM MARKETS I NATIONAL I 5

TRANSACTIONS A N D K EY P R I C E P O I N T S

ALL PROPERTIES SOLD ACROSS THE COUNTRY

All proper ty

ENGLAND & WALES

Chart shows a rolling 12 month change in transactions compared to the previous 12 month period for all properties and those priced at £1m or over.

£1m+

0% -2.5% -5% -7.5% -10% -12.5% -15% NOV 2018

DEC 2018

JAN 2019

FEB 2019

MAR 2019

APR 2019

MAY 2019

JUN 2019

JUL 2019

AUG 2019

SEP 2019

OCT 2019

Source: Dataloft, Land Registry

£230,094 £676,000 £998,159

£214,916 £703,182 £1,108,535

£179,253 £552,503 £865,748

£215,996 £539,274 £740,892

£350,767 £857,307 £1,226,926

£233,427 £670,857 £974,666

6 I PREMIUM MARKETS I NATIONAL

NATIONAL MA IN S TR E AM MAR K E T

ALL PROPERTIES SOLD ACROSS THE REGION

Rolling 12 month change in the average price paid for all properties sold compared to the previous 12 month period.

ENGLAND & WALES

2.5%

2%

1.5%

1%

0.5%

0% DEC 2018

JAN 2019

FEB 2019

MAR 2019

APR 2019

MAY 2019

JUN 2019

JUL 2019

AUG 2019

SEP 2019

OCT 2019

NOV 2019

Source: Dataloft, Land Registry

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

Average price paid per square foot for all property transactions.

ENGLAND & WALES

£400

£300

£330 £273 £246

£231

£200

£203 £100

0 FLAT/APARTMENT

TERRACED

SEMI-DETACHED

DETACHED

ALL PROPERTY Source: Dataloft, Land Registry

PREMIUM MARKETS I NATIONAL I 7

AVAILABILITY A N D TI M E TO S E L L

AVERAGE NUMBER OF DAYS TO SELL

NATIONAL

Average number of days from when a property is first marketed on Rightmove to when the estate agent marks it as “sold subject to contract”.

100

80

77 65

71

70

67

64

63

62

62

62

62

64

APR 2019

MAY 2019

JUNE 2019

JULY 2019

AUG 2019

SEP 2019

OCT 2019

60

67

40

20

0 NOV 2018

DEC 2018

JAN 2019

FEB 2019

MAR 2019

NOV 2019

Source: Rightmove

PROPERTIES AVAILABLE TO BUY PER AGENT

NATIONAL

Average stock per agent calculated by the average number of properties an agent has on Rightmove each day across the month.

60 50 40 30 20 10 0 NOV 2018

DEC 2018

JAN 2019

FEB 2019

MAR 2019

APR 2019

MAY 2019

JUNE 2019

JULY 2019

AUG 2019

SEP 2019

OCT 2019

NOV 2019

Source: Rightmove

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 07-01-2020.