This week, half-yearly report cards from developer Taylor Wimpey and estate agent Foxtons showed Wimpey to be working below the expected level, and Foxtons working above the expected level. Angela Rayner laid out the government’s “plans” for future development, and Sir Michael Lyons was appointed head boy; his first task to head up a new towns task force. Results for June showed house prices improve on the previous month and the board of governors voted to reduce the base rate to 5%. Welcome to another UK Property News Recap – 02.08.2024.
The Great British “Sell Off.”
Chancellor of the Exchequer Rachel Reeves kicked off the week laying out her plans to save £500m by selling off government buildings and cutting back on external consultants. This signalled to potential buyers that all offers are invited.
Foxtons half-year results
Foxtons made a dramatic 2024 comeback with double-digit revenue and earnings growth driven by the increased volume of their lettings business, the acquisition of Ludlow Thompson and its letting book paying off, and sales market gains.
For the first half of the year, revenue increased 11% across all three businesses:
- Lettings revenue up 5% to £52.4m.
- Sales revenue up 28% to £21.6m.
- Financial Services revenue up 7% to £4.5m.
Zoopla House Price Index – July 2024
Zoopla’s HPI found average UK house prices shuffled a step forward after taking a few steps back in 2023, increasing 0.1%, giving sellers an extra £310.
Buyers looking for a home or investment continue to opt for cheaper homes, further afield, to overcome the affordability challenge or net a higher yield. As a result, northern areas continue to drive growth; with annual inflation increasing +3.9% in Northern Ireland as opposed to -1.2% in the East of England.
Agreed sales numbers got a boost, up 16% on last year, as those who could afford to move pressed ahead, hoping to snap up a property before it regained any more price ground – average discounts off asking prices reduced from £23,000 in October 2023 to £16,000 in June 2024.
The annual rate of UK house price inflation is expected to increase towards +2% over the second half of 2024. This is expected to encourage more sellers to market come the autumn, especially if a base cut is forthcoming.
Angela Rayner outlines Labour’s national housing policy
Angela Rayner delivered a speech to parliament on Tuesday outlining the government’s plans to change national housing policy to boost growth and provide the additional housing the country desperately needs. Developers welcomed the changes but many question if Labour’s plans are over-ambitious without a series of base cuts, improvements to infrastructure, and an increase in the workforce.
Key takeaways:
– Local housing targets to be mandatory
– Government to build 1.5 million homes that are high-quality, well-designed and sustainable
– Housing targets to rise to 370,000
– London targets to reduce to 80,000
– Government to change the method used to calculate housing
– Brownfield sites to be developed first
– Local authorities to review their greenbelt if needed to meet housing targets
-Plans to be laid out to make it easier to build laboratories, gigafactories, data centres, and electricity grid connections.
Money and Credit – June 2024
The Bank of England’s Money and Credit Report for June 2024 found net mortgage approvals for house purchases remained broadly stable at 60,000 in June, while approvals for remortgaging decreased from 29,300 to 27,500 over the same period. This was despite the ‘effective’ interest rate on newly drawn mortgages increasing 3 basis points, to 4.82% in June.
Taylor Wimpey Half-Year Results
High interest rates dented Taylor Wimpey’s half-year results as buyer affordability remained restricted and operation costs increased along with cladding provisions.
Profits, revenue and completions were down on the previous year along with the company’s total UK average selling price on completions, which decreased by 0.9% to £317k (H1 2023: £320k.) Despite this, the developer remains optimistic for the future and welcomes Labour’s plan to reform planning.
Independent New Towns Taskforce Set Up
Sir Michael Lyons was appointed chair of the new independent New Towns Taskforce, supported by housing economist Dame Kate Barker as deputy chair. Over the next 12 months, they will shortlist appropriate locations for new towns to be governed by a ‘New Towns Code’ and TARGET rates of 40% affordable housing.
The most expensive to the cheapest coastal towns
The most expensive coastal area is dependent on better weather. Sandbanks in Poole, Dorset topped the most expensive coastal area in Great Britain, with an average asking price of £1,582,331 and Saltcoats in Ayrshire, Scotland, the cheapest with an average asking price of £114,365.
The biggest coastal hot spot went to Peterlee in County Durham, with a 15% increase in asking prices on the previous year. Overall though, the post-pandemic coastal race has waned, with the most searched area now being London.
Nationwide House Price Index July 2024
Nationwide HPI showed house prices continued to improve on last year’s performance. The annual rate of house price growth increased to 2.1% from 1.5% in June – the fastest pace since December 2022. After a 0.3% uplift on the previous month, the average house price is now £266,334. Despite this prices are still around 2.8% below the all-time highs recorded in the summer of 2022. So, sellers hoping to achieve the same will have some time to wait.
The Base Rate Cut
Those “tracking” the base rate will breathe a little easier after the Bank of England took its first step down off “Table Mountain” on Thursday – reducing the base rate to 5%. Progress will be slow going and will leave many still riddled with financial anxiety till more headway is made, but it is a positive move, in the right direction.
Affordable they are not
The I Paper, reported that “a snapshot survey of 13 major house builders – that between them build four in 10 homes in England – found that in January each had an average of 1,000 affordable homes with detailed planning permission that were held up because they couldn’t find a purchaser for affordable homes built under section 106 planning deals.”
When there is no money left in the kitty due to increased maintenance and cladding remedial costs and borrowing is expensive- the homeless remain homeless.
And that concludes another UK Property News Recap – 02.08.2024. If you have any comments or suggestions, please get in contact here.
