Burton Property Market Update - September
The government have announced the largest tax cutting budget since the late 1980s, In a major shift to economic policy the government is aiming to reduce the tax burden to stimulate economic growth.
The governments mini-budget has created uncertainty on global markets, leading the Bank of England to intervene to stabilise the markets. There are concerns interest rates will rise more than predicted.
The Bank of England have raised the base rate of interest to 2.25%, the seventh consecutive rate rise. The 0.5% rise is lower than the 0.75% many expected. The current rate of inflation is 9.9%.
The UK economy grew by 0.2% in July, following a 0.6% fall in June . The level of growth was slightly below economists expectations (0.3%). The Bank of England have warned that the UK may already be in recession.
The government have raised the threshold at which Stamp Duty taxation is to be paid from £125,000 to £250,000, for first-time buyers the threshold has been raised from £300,000 to £425,000.
At 15.5% UK house price growth in the year to July was at its strongest since May 2003. The rise reflects how property prices a year ago were impacted by the Stamp Duty Holiday. Month-on-month prices rose by 2.0%.
The average asking price of a newly marketed property fell by 1.3% in August. This is on par with August activity over the past 10 years but represents the first fall in 2022 (Rightmove).
Close to 105,000 property sales took place in August, the strongest August since 2007 according to data released by the HMRC. Nearly 310,000 sales took place June-August, a fall of 4.2% on the three months previously.
80% of sellers outside of London believe they will be able to sell their property within 3 months according to OntheMarket. Across London the figure is 76%.
On average properties in July, sold subject to contract, in just 33 days. However at present it is taking an average of 136 days (4.5 months) to complete a sale (Rightmove).
63,770 mortgage approvals took place in July, a 5% fall versus the pre-pandemic (2015-2019) average. At £26.1 billion mortgage lending was significantly higher than a year ago. (Bank of England).
The average two-year fixed mortgage rate now surpasses 4%, and has risen by 1.75% since December 2021 (Moneyfacts).
Rightmove report new listings are up 12% in August compared to 2021, but remain 6% lower than in 2019. Available stock is 39% lower than in 2019.
At 3.4% UK rental price growth in the year to August is at its strongest since records began in 2016. Rental prices continues to rise across much of the UK, the ONS index based on both tenancy renewals and new tenancies.
The government have launched a consultation into the introduction and enforcement of a Decent Homes Standard in the private rented sector in England. The consultation will run until Friday 14 October 2022.
Tenant demand continues to rise but the pace is moderating. RICS report a net balance of +36 of respondents reported an increase over the past quarter. August and September are usually the busiest months for rental activity.
Lee Rowley has been appointed Housing Minister and Simon Clarke Secretary of State for the Department of Levelling Up, Housing and Communities. Housing was mentioned in the Prime Ministers first speech in office.
Glenigan report that residential starts fell 12% year-on-year in the three months in July. New energy efficiency regulations requiring new homes to achieve an overall reduction of 31%in carbon emissions came into effect on 15 June.
A total of 40,289 new homes were completed in Q2 2022, up 16% on Q2 2021. The NHBC report 11 out of 12 regions witnessed growth. Private sector completions rose 23%.
