This week, increases in council tax were approved by Angela Rayner. Nicholson was “crest” fallen, Rightmove tapped up sellers, and while prime property prices faced losses, the prime rental market saw gains. Despite this and other news, the focus remained on the Monetary Policy Committee meeting to determine the UK base rate. Construction output had fallen in January, and house price foundations were shaky, so a rate cut was hoped for – and delivered. However, more cuts are needed for borrowers and investors to feel a significant difference. Welcome to another UK Property News Recap – 07.02.2025.
Immigration not at fault for rising house prices
The Telegraph started off the week dispelling the myth that immigration had increased house prices. Instead, higher wages and reduced rates in the 2000s were found to be responsible for boosting house price growth in the capital which in turn spilled over into areas first accessible and then further afield, as second homes became affordable. Blame for rental price growth however did fall on immigration, as they revealed immigrants are far more likely to rent.
London prime prices tarnish over time
The borough of Hampstead was revealed to be the quickest of London’s prime addresses to sell, with the average home taking 79 days to shift. To achieve this, it offered the biggest discount, averaging £305,220, compared to £200,000 across all of prime London. In contrast, even a substantial average discount of £261,080 in Bayswater didn’t motivate buyers, with the average time to sell there taking 191 days.
Council tax on the rise
Six struggling councils were given the green light by Angela Rayner to raise council tax by up to 10 per cent, affecting more than three million people. Residents at Bradford and Newham can expect a 9.99% and 8.99% increase in April 2025 respectively. Windsor and Maidenhead, 9% and Birmingham, Somerset and Trafford councils 7.5%.
Prime rentals get a nom-dom boost
The prime and super prime London rental markets saw an uplift in the number of tenancies at the tail end of 2024, as international buyers abandoned the sales market in favour of expensive temporary accommodation.
According to Knight Frank data, in the final quarter of 2024 rentals charging above £1,000 per week was 8% higher than the same period in 2023 and 11% higher if £5,000 per week.
Crest fallen – Profits fall for developer Crest Nicholson
2023 was supposed to be the kicker but 2024 proved even more costly for developer Crest Nicholson:
The group’s sales rate retracted from 0.52 in FY23 to 0.48 in FY24 along with its operating profit; down from £50.8m to £31.3m. Optimism for the year ahead remains but caution has crept in till rate cuts are realised.
The best time to sell
Property portal Rightmove claimed February and March are the best months to list a home for sale with increased probability of completing: 7 out of 10 sales making it. If those months don’t work for you, the portal claims April ain’t half bad either…
Many sellers of larger properties are waiting for a base cut, which was anticipated and delivered on Thursday, and their gardens to blossom before listing. As a result there is less stock to compete with in February which could explain why sales are more likely to complete. Sellers waiting may want to test now to avoid increased competition.
Repair and deliver
As part of the Plan for Change, the Government is investing £2.65bn over two years which will benefit 52,000 properties with new defences by March 2026 and another 14,500 via defence repairs and maintenance.
Grey belt falls short
Chairman of the Lords Built Environment Committee, Lord Daniel Moylan penned a billet doux to Angela Rayner, saying changes to the NPPF “have now made the concept of grey belt land largely redundant as land will now more likely be released from the green belt through existing channels instead”. On tracking its effectiveness; estimates range from 50,000 to four million, which the committee said “suggests that the potential impact of the policy had not been adequately assessed before it was announced”. Lastly, they addressed the lack of planning officers saying the “recruitment target of 300 additional planners is insufficient and unlikely to have any meaningful impact”.
Staking their build-to-rent prominance proves profitable for Grainger
Grainger, the UK’s largest listed provider of private rental homes, received a 15% boost to net rental income in the four months to the end of January and expects earnings to grow by 50% in the medium term.
The group waved smaller landlords goodbye and without a backward glance turned to dominating the rental market by adding an additional 5,000 build-to-rent homes.
Construction slows
General economic uncertainty, rising outgoings and stubborn rates all knocked construction confidence. All three categories of construction work in S&P Global’s UK construction PMI showed a reduction in output during January 2025. The lack of civil engineering activity was put down to the wet weather, while commercial construction suffered from a lack of confidence, but house building, which the Government is banking on driving economic growth, fell for the fourth consecutive month, at the fastest pace since January 2024.
Overall, confidence was subdued in a sector that was not so long ago, full of optimism.
Mortgage arrears fall but possessions increase
The latest data from UK Finance data showed mortgage arrears, when compared to the previous quarter, fell for both residential and buy-to-let mortgages while repossessions increased by 12% or 1,030 while buy-to-let properties remained consistent at 700.
Despite the increase, figures remain historically low and panic is a way off.
Predicted base rate cut is realised
The long awaited Monetary Policy Committee February meet-up didn’t fail to deliver on its widely anticipated rate cut. The nine-strong committee voted 7-2 to cut the base rate to 4.5% from 4.75%. As a result many hope interest rates will follow suit but swap rates are a fickle beast and may not coincide, or budge as willingly, while inflation remains high. What was encouraging was the mood music shift within the bank, with two members pushing for more dynamic cuts this time round of 0.5 percentage points.
March brings relief to Santander borrowers with tracker mortgages
In response to the Bank of England’s rate announcement, Santander reacted swiftly, slashing all existing tracker mortgage products linked to the base rate by 0.25% from 3 March 2025. This will include the Santander Follow-on Rate (FoR) which will decrease to 7.75% from 8.00%. At the same time the lender’s Standard Variable Rate will also decrease by 0.25% to 6.75% from 7.00% on 3 March 2025.
New Year house price rises
January house prices got a boost off the back of eager first time buyers keen to beat the stamp duty deadline. Prices increased 0.7% on last month’s festive efforts, making the average house price, according to lender Halifax now £299,138. That said, the annual rate of inflation slowed for two thirds of all regions, Northern Ireland however remains the outlier, average annual house prices here increasing 5.9% in January 2025.
Energy efficiency upgrades pushed back
Landlords have been given an extra two years to improve the energy efficiency of their properties by 2030. Upgrades will be capped at £15k and landlords will be given the choice as to what improvements they make. An affordability exemption, will lower costs to £10,000 for those properties with lower rents and grants will be made available via the Boiler Upgrade Scheme, and Warm Homes.
And that concludes another UK Property News Recap – 07.02.2025. If you have any comments or suggestions, please get in touch.
