This week, the “prime” league gained traction while the Home Builders Federation provided commentary on how to improve the game as Halifax & Propertymark revealed their statistics on the latest market movement. Developer Vestry made a significant signing to Blackstone Real Estate and Regis, and Bellway reserved more seats for 2024. Welcome to this week’s UK Property News Recap – 07.06.2024
The buying game
The Super Prime Market is elusive to many and exclusive to the few. Despite this, every year there is another property show focused on the super prime market in London, in which this private market is ‘supposedly’ exposed to millions by agents who like to create hashtags for themselves while sporting designer clothes in the obligatory overpriced car. Self-deprecating they are not, and the properties they sell are ostentatious and regurgitated from previous incarnations of the same show with a different name. The sellers are ever hopeful that this is the show that will generate enough press to warrant the delusional price tag.
Many have slagged off the show “Buying London” as misrepresenting how the super prime market works. Its star, Daniel Daggers, I’m sure is well aware that it doesn’t resemble his true day to day but does he care? Of course, not. While everyone jostles for their own press, to be the first to call balderdash, he’s laughing. For there is no such thing as bad publicity but there is envy.
Knight Frank Global Super Prime Analysis
This is a tale of 11 key global, super prime, property markets and 426 sales in Q1 2024 according to Knight Frank. Generally, sales were up against the previous two quarters but down annually yet above pre-Covid levels. Dubai leads the “prime” way both annually and in Q1 2024 while London came in second place annually but lost out to New York and Palm Beach in Q1.
Vestry strikes a build-to-rent deal with Blackstone Real Estate and Regis
When the residential sales market gets tough – developers build-to-rent. Vistry ate into 36 of its previously marked residential sites in predominantly the south east, where buyers are still struggling to buy, to strike a deal with Blackstone Real Estate and Regis to build around 1,750 homes for the private rented sector. As well as topping up their profits for the year, this should appease shareholders.
Propertymark UK Housing Insight Report for April 2024
Propertymark’s UK Housing Insight Report showed valuations and listings were all up alongside buyer registrations and agreed sales. This was a result of both buyer and sellers preparing for the long-awaited second half of the year to kick off with a base rate cut. With no whistle blown, the percentage of agreed sales below the asking price remains high. The disillusionment of the many outweighs the satisfied few. To move forward pricing needs to remain realistic not aspirational.
The Home Builders Federation development proposals
The Home Builders Federation’s penned proposals for the next Government to increase development, which rely heavily on councils having a local plan and sticking to it, include:
– Decisions about where to put new homes should be made by councils when they draw up their local plan to guide development, and not rehashed for each specific application.
– Remove the use of planning committees for those applications which are broadly in-line with the local plan [or which are] below an agreed threshold
– The government should increase incentives by only giving infrastructure funding to authorities with a local plan
Property tax gauntlet thrown
Jeremy Hunt, writing for The Telegraph, challenged Keir Starmer to match a new Tory pledge not to increase capital gains tax, stamp duty or the number of council tax bands.
“I am throwing down the gauntlet to (shadow chancellor) Rachel Reeves and Sir Keir Starmer to join us in this pledge,” he declared.
John Healey, the shadow defence secretary, when asked if Labour could increase stamp duty, said: “We will not raise the taxes that are most important to working people…”
Read what you will from that…
S&P Global UK Construction Purchasing Managers’ Index
A boost in new orders saw the S&P Global UK Construction Purchasing Managers’ Index rise to 54.7 from 53.0 in April, the fastest increase for two years. Residential projects may have only increased marginally, but this was the first time since May 2022 that all three monitored categories saw activity increase.
The commercial category accelerated the rate of growth to a two-year high followed by a more consistent rate of growth by civil engineering.
The ECB lower the base rate
The ECB’s Governing Council decided to lower its three key interest rates by 25 basis points on Thursday, the first cut to eurozone interest rates since 2019. Bets are now being placed (again) on whether this will encourage the Bank of England to prune earlier this summer or not…
Zoopla HPI for May 2024
Zoopla’s rental HPI April 2024 shows that demand is waning just as supply increases for summer. This slowed the annual rate of rental inflation for new lets to 6.6% in April 2024. London led the slowdown with average rents rising by just 3.7% while the North East (9.5%) and Scotland (9.3%) continued to find room to further squeeze tenants.
Move over “Help to buy”, hello “Freedom to buy”
Labour adds a mortgage guarantee scheme for first time buyers to its housing proposals.
This will appease developers but affordability remains an issue, potentially made worse by the very scheme designed to set first timers “free.”
Halifax HPI May 2024
Base rate date jitters cause average house prices to take a baby step back in April, dropping -0.1% but up +1.5% annually, making the average house price £288,688. The North West increased +3.8%, Northern Ireland +3.2%, Scotland +1.9% & Wales +0.7% but the East of England fell -0.8% on last year according to Halifax HPI for May 2024.
Developer Bellway receives a boost in reservations
Some buyers looking to capitalise on discounts before rate changes activate others, giving them less room to negotiate, made the “new build” move.
Bellway received a boost to its expected numbers as reservations per outlet increased per week by 6.9% compared to the prior year equivalent (2023 – 0.58). This resulted in its forward order book increasing from 4,411 homes at the start of the current financial year to 5,346 homes. Buyer incentives remain but pricing is up from previous guidance of £295,000 to £310,306 but still down on the year to July 23 when it was £310,306.
And that concludes another UK Property News Recap – 07.06.2024. If you have any comments or suggestions, please get in touch here.
