INTRODUCTION
2021 flew by didn’t it? House prices have also flown this year. The latest land registry figures show annual house price increases of 10.2% on average across the UK - The craziest part is that this is a slowdown in the growth rate compared to previous months. This report goes through house prices, mortgage market updates and the major news stories of the past 4 weeks.
HOUSE PRICES - UK House Price Index
The UK HPI is based on completed housing transactions. Typically, a house purchase can take 6 to 8 weeks to reach completion. Therefore, the price data feeding into this 2021 UK HPI will reflect sales agreed in April.
UK
- Average Price UK £268,349 - October 2021
- Annual Price Change 10.2% - October 2021
- Monthly Price Change 1.1% - October 2021
London
- London Average Price = £516,285 - October 2021
- London Annual Price Change = 6.2% - October 2021
- London Monthly Price Change = 1.9% - October - 2021
HOUSE PRICES - HALIFAX HPI
The Halifax uses its own database of approximately 300,000 mortgage approvals per annum (ca. 25% of all mortgages) as a basis for its monthly house price reports. Because it uses approved loans rather than completed mortgages, the Halifax can obtain data earlier than the Land Registry
UK
- Average Price: £272,992 - November 2021
- Annual Price Change: +8.2% - November 2021
- Monthly Price Change +1% - November 2021
TRANSACTIONS (October 2021)
the provisional seasonally adjusted estimate of UK residential transactions in October 2021 is 76,930, 28.2% lower than October 2020 and 52.0% lower than September 2021
RENTAL INDEX MARKET (October 2021)
Data is gathered from our tenant referencing service, and our rental amounts are based on actual achieved rental prices with accurate tenancy start dates in a reported month, rather than advertised costs (HomeLet)
- Average rent in UK = £1,058
- Annual Variation for the UK = +8.6% (year on year)
- Average rent in London = £1757
- Annual Variation for London = +11.5% (year on year)
- Household Rent To Income Ratio UK: 34% (single earner)
“The private rented sector has remained exceptionally resilient, and demand for property has remained high, something we expect to continue seeing as we shortly say goodbye to 2021 and look forwards to the opportunities 2022 will bring” - Homelet
MORTGAGE MARKET
An average homeowner on a standard variable rate (SVR) could save more than £5,000 in payments by moving onto a new two-year fix, analysis by Experian shows.
Just one third of first-time mortgage borrowers had their loan applications accepted on the first attempt, according to a report. Aldermore bank’s First Time Buyer Index found that 35% of the 2,015 FTBs surveyed secured a mortgage offer on the first try, down from 48% pre-Covid-19, when the previous index was published.
The average rates at 95% LTV are the lowest on record, says Moneyfacts.
For a two-year fix, first-time buyers with a 5% deposit will be able to secure a rate of 3.09% on average and, for a five-year fix, 3.39%. In December 2019, these rates stood at 3.25% and 3.57%, respectively.
Total mortgage product choice has now hit 5,315. A level not reached since MoneyFacts recorded 6,192 products on offer in March 2008.
OTHER NEWS
The annual Consumer Price Index (CPI) reading for inflation grew by 5.1% in November, up from 4.2% the month previous. This is the highest level of inflation seen in the UK since September 2011, when CPI inflation came to 5.2%.
UK Finance have estimated that total house purchase transactions - including cash purchases as well as mortgaged purchases - will reach 1.5m this year which is 47 per cent higher than 2020 and the largest total since 2007.
The average first-time buyer across Britain has seen the cost of purchasing their initial home climb by £8,663 per year on average over the last decade, according to research from MoveStreets
The Bank of England plans to remove the rate rise stress test for mortgage borrowers, making it easier to get a bigger loan.The affordability test, also known as a reversion rate, is designed to check that borrowers could still meet their mortgage payments in the event of a rate rise. Removing or relaxing this restriction would make it easier for borrowers to take out larger mortgages – but mortgage experts have warned that doing so would also send house prices even higher than they are already
The value of buy-to-let lending jumped by 83% this year to £18 billion when compared to 2020, trade association UK Finance has reported. Its data shows the landlord market for both new purchases and remortgages rebounding strongly this year, although this hyperactivity is likely to return to more normal levels of approximately £13 billion next year and £12 billion in 2023.
This year will set a new record for mortgages with £316billion lent in total, of which £200billion went to people moving home. It is the highest amount lent in any year since before the global financial crisis.
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