This week, PM Keir Starmer felt the need to start campaigning for the next election early after a rocky start. There was no Edstone but there were 6 milestones to reach, including hitting 1.5m new homes in five years. Given councils, in the same week, said targets were admirable but unrealistic, his choice to double down on his promise shows his “optimism” if nothing else for the future. At the same time, both lenders Nationwide and Halifax flummoxed buyers by releasing data that showed the average house price was only getting more expensive (on their indices, anyway). This will encourage developers who’ve had a dismal two years with private sellers to get rate ready in 2026, which may help Starmer realise his target or at least improve on previous years under-performance. Welcome to another UK Property News Recap – 06.12.2024.
Nationwide HPI claims prices are regaining lost ground
According to lender Nationwide, house prices are nipping at the heels of 2022 peak prices; up 1.2% on October’s prices and 3.7% annually; making the average UK house price only 1% shy of the lofty prices achieved in 2022.
Buyers who browsed the portals but didn’t view in 2023 due to increased rates, started 2024 with intent only to be left further confused by the fluctuating market. In the end, as rates trimmed down, those who could now manage the reach, opted to move, rather than spend another year window shopping while haemorrhaging money in rent.
Councils’ callout housing targets
Post consultation, UK councils agreed that new housing is needed but questioned the government’s algorithm that is based on the number of affordable housing in each area rather than who is EXPECTED to LIVE THERE. The consensus is that targets are a fiction, in reality they can’t be hit while they ignore strains on “local infrastructure, land shortages, and a lack of capacity in the planning system and construction industry.”
Cladding end date, more false endings
Angela Rayner tries to pacify those wrapped in cladding by promising that “by the end of 2029, every building of 11 metres & over with unsafe cladding would either have been fixed or have a completion DATE for remedial work, otherwise landlords would face hefty fines.” Those buildings under 11 metres aren’t mentioned and a date past 2029 means the work isn’t complete. Rather than pacifying, it only provoked further rage from those suffering financially and mentally from their flammable homes.
Prime property markets retreat
Political and economic uncertainties, notably in the U.S, have shaken the $10 million+ property foundations; chipping at values and activity across 12 key global markets.
According to Knight Frank prices fell 17% and the volume of sales decreased by 18%, to a total of 406 in Q3 2024. “Down from 496 in the previous quarter and below the 464 sales reported in the same period last year.”
London, ahead of the budget, surprisingly fared better. Super-prime sales increased marginally in the capital from 51 compared to 47 in Q2. However, the volume and price of sales remain significantly below the post-pandemic buying frenzy.
Commissions and arrangement fees to be exposed
Many leaseholders are fleeced by excessive “arrangement fees”. Today, a consultation is underway, to expose this practice made between landlords, freeholders and property managing agents so it can be reworked to only include valid payments for a fixed fee that is paid separately from the insurance premium. The results will inform secondary legislation that will form part of the Leasehold and Freehold Reform Act 2024.
Rates yo-yo back down
HSBC followed Barclays lead by cutting rates on its residential fixed rate and buy-to-let products, after swap rates stabilised (& buyers went into Christmas higher-rate hibernation.) Other lenders are expected to follow suit.
The Centre for Cities, a thinktank, claimed current planning reforms aren’t enough to hit the 1.5m housing target set by the government
The Centre for Cities recommends saving time and money in planning by zoning areas so “there is then a presumption that planning permission will be granted, as long as applications meet a series of rules about the quality of developments.”
In theory this makes sense, in practice just getting a consensus on the zoning framework could take forever.
The government’s joint plan for developer-led remediation gains 29 out of 54 signatories
The Ministry for Housing, Communities and Local Government published its joint plan alongside its wider Remediation Acceleration Plan this week. This included 35 commitments by developers and the government aims to accelerate works to find and fix unsafe buildings and speed up the cost recovery negotiations between developers and social providers.
Developers also committed to a number of targets.
These included finishing assessments of all buildings by the end of July next year, starting or completing remedial works on 80% of their buildings by the end of July 2026 and on all their buildings by the end of July 2027.
Home buyers are under the influence of pub culture
A home is never bought in isolation; where it is and what it’s close to can make or break any deal. According to Zoopla data, 36% of Brits would not consider a home where they couldn’t walk to a pub. If they make it to one, and they like the property, 18% will have a few, for Dutch courage, before offering.
Given buying a home is on the whole the biggest purchase and commitment most people make, the belief is if the boozer is good, the community will be too.
M&S’s plans hang in the balance to tailor Oxford Street
The fate of M&S’s Oxford Street store planning application fell on Housing Secretary Angela Rayner’s shoulders this week who ruled, after a four year planning hiatus, in favour of rebuilding the flagship store in London. The carbon argument, though valid, against demolishing & rebuilding, felt more like a ‘front’ for preserving the aesthetic. Fundamentally, this ruling will send a positive message to investors and a negative one to environmentalists.
Wisdom is a tenant in the house of nature
Woodbridge in Suffolk was crowned the happiest place to live in Rightmove’s UK annual list. In second place came Richmond, last year’s winner, and Hexham in third place.
Those living closer to nature get a boost to serotonin levels as opposed to those who don’t but the importance of being close to family and friends is downgraded in favour of focusing on oneself. This “inner peace” can be found in Scotland, Wales and the South West but less so in the East and West Midlands.
Those over 55+ were unsurprisingly more content where they were than the Gen- Z generation who aspire to greener pastures.
OECD Economic Outlook predicts prolonged drizzle
The latest OECD Economic Outlook predicts inflation will be higher for longer, dampening the hopes of buyers and existing borrowers for noticeable rate cuts in the short term
All is not equal in the construction industry
The commercial sector provided a boost to the latest UK S&P Global Construction Index which showed the strongest rise in construction activity in two and a half years. Civil engineering also continued to fare well but housing continued its descent into negative territory as a result of continued affordability issues and uncertainty around when and by how much, rates will retreat. This has caused buyers to pull back, weakening demand, disincentivising developers to build more private housing at speed.
Savills forecast remain dull till 2026
For those looking to sell, the housing market doesn’t look set to kick off, especially for the Prime Central London market, till 2026. Until then, the market will remain divided, with some regions benched while others score further afield.
Halifax November 2024 HPI
The lower end of the market drives overall house price growth as desperation to move on after years of pricing confusion and higher rates subside. According to mortgage lender Halifax, for the fifth consecutive month house prices rose, increasing 1.3% on last month, to make the average house now worth £298,083. For those trawling the portals and watching price reductions this will beggar belief. The market is a fickle beast and one person’s gain is another’s loss. It all breaks down to the property, location and affordability.
For those selling in Northern Ireland prices continued their upward trajectory, up 6.8% annually. In the North West prices were up 5.9% and 5.5% in the West Midlands. London was up 3.5% but Scotland’s growth slowed to 2.8%.
“Getting into teaching” to benefit oneself and not others
The Initial Teacher Training grant scheme is being abused by some to fund house purchases or a move abroad. The fact the government has created a scheme that gives away taxpayers’ money but is too expensive to police is a reckless use of our money.
Affordable homes lead the construction front
New half-year Homes England housebuilding statistics showed new starts and completions were on the rise with 15,682 new houses starting on site and 14,295 new homes completed between 1 April & 30 September 2024.
And that concludes another UK Property News Recap – 06.12.2024. If you have any comments or suggestions, please get in touch here
