INTRODUCTION
4 months into the year and the UK property market is still moving at lightning pace. Government incentives, stamp duty holidays, low interest rates and lockdown savings have collectively contributed towards house prices rising at the fastest rate in 5 years.
The question on everyone’s mind is when the market will cool off?
KEY STATISTICS
The latest up to date official figures from The Office For National Statistics & HM Land Registry provide us with data from the first month of 2021.
HOUSE PRICES - Latest UK House Price Index (February 2021)
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 the January 2021 UK HPI will reflect sales agreed in November.
UK
- Average Price UK £2509,341 - February 2021
- Annual Price Change 8.6% - February 2021
- Monthly Price Change 0.0% - February 2021
London
- London Average Price = £496,269 - February 2021
- London Annual Price Change = 4.6% - February 2021
- London Monthly Price Change = -1.40% - February 2021
HOUSE PRICES - HALIFAX HPI (April 2021)
The Halifax HPI provides us with more recent house price data (from mortgage approvals)
The Halifax House Price Index is the UK's longest running monthly house price series with data covering the whole country going back to January 1983
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: £258,204 - May 2021
- Annual Price Change: +8.2% - May 2021
- Monthly Price Change +1.4% - May 2021
TRANSACTIONS (March 2021)
(Transactions involving the creation of a new register, such as new builds, are more complex and require more time to process)
- Estimated number of UK residential transactions, 190,980 - March 2021
- Annual Transaction Volume Change = 102.3% increase - March 2021
- Monthly Transaction Volume Change = 24.5% increase - March 2021
RENTAL MARKET (April 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 = £996
- Annual Variation for the UK = +2.9% (year on year)
- Average rent in London = £1580
- Annual Variation for London = -5.3% (year on year)
- Household Rent To Income Ratio UK: 30%
- Household Rent To Income Ratio UK: 34%
“We’re continuing to see a sustained demand for let property; against a backdrop of reduced stock, with landlords facing increased costs and growing concerns about legislative changes” - Homelet
MORTGAGE MARKET
- At the moment, rates in the remortgage charts remain highly competitive, making this a good time for homeowners to remortgage
- Those looking to take their first step onto the property ladder will be pleased to see that lenders are continuing to re-enter this market.
- Virgin Money announced they will also be offering deals for those with a 5% deposit under the Government’s mortgage guarantee scheme.
- Figures due to be published in the Moneyfacts UK Mortgage Trends Treasury Report show that the total number of mortgage deals available to consumers increased by 85 between April and May, up from 3,842 to 3,927 - this is the highest figure since March 2020 when there were 5,222 deals available.
- The number of deals available to those with a 5% deposit or a 95% loan-to-value (LTV), saw the biggest increase, up by 78 month-on-month, from just 34 deals in April to 112 in May
- Borrowers looking to get a mortgage deal may want to consider acting sooner rather than waiting, as figures show that average mortgage rates on both two and five year fixed deals have continued to rise, with the average two year fixed rate now at its highest level since June 2016
OTHER NEWS
Nearly half a million private renters are likely to be pushed into rental arrears by the end of the year as job losses cripple landlords and tenants, new research showed.
The Government’s forecast of 6.5% unemployment this year will mean a further 400,000 private tenants will fall significantly behind on their rental payments in 2021, according to a report by the London School of Economics and Political Science.
Rents outside London have hit a six-year high thanks to a flood of tenants leaving the capital for towns and smaller cities
Record demand for rentals outside of London has driven average asking rents in the UK, excluding the capital, to £982 per month. The figure is 4.2% higher than the average recorded in the first three months of 2020
Coronavirus and the Government’s buy-to-let tax crackdown have sparked an exodus of landlords from the South in favour of the higher rental yields available in Northern parts of Britain
In London, landlords ditched properties with yields of 4.2%. Meanwhile, the average investor buying in the North East purchased property with a 9% yield.
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