This week prices were reported to have been on the rise, but with mortgage rates also increasing, any further growth looks set to be curtailed in the short term and restrained in the long term. For the many who hoped for a break from inflationary rates come the end of year, this is yet another setback, and will force some to return to the rental market, which continues to push affordability boundaries as more landlords abandon ship. Welcome to another UK Property News Recap – 15.11.2024.
Hamptons downgrades housing forecast
Off the back of the budget and concerns inflation will be higher and in turn rates for longer, estate agent Hamptons downgraded its house price forecast by 1.5 percentage points for 2026 and reined in longer term growth overall.
That said, they expect prices to rise by 3.0% across the UK in 2025, followed by 3.5% in 2026 and 2.5% in 2027 as rates stabilise and affordability improves. Transactions are also predicted to increase with a potential initial surge at the start of 2025 from first time buyers looking to beat the stamp duty threshold increase.
Social housing heating becomes too hot to handle
For those homeowners that got on the housing ladder via Right to Buy on the Lillington Estate in Pimlico, any discount achieved has swiftly been replaced with a £66k refurbishment bill for the estate’s heating system. Labour’s 2030 net zero target will prove costly to residents here but it goes some way to explaining why the Government remains open to selling off their old Right to Buy stock, albeit with less of a discount, over the new stock.
Acadata HPI House Price Index October 2024
In the Acadata HPI for England and Wales, which covers both cash and mortgage sales, house prices rose for the first time in 6 months, edging up by 0.2% (£600) to £354,822.
Despite this, prices remained 3.4% lower than a year ago and 6% down from their 2022 peak.
More specifically, house price recovery in England and Wales was proved to be laborious and divided. Prices generally struggled after the summer holidays to bounce back in September while the budget loomed.
Lenders backtrack
The consensus that the Bank of England would trim the base rate in November was proved correct, which is why rates, temporarily, descended; markets having previously factored in the swap rate movement. However, the lack of certainty around the next base rate trim after the inflammatory budget and Trump’s election has caused swap rates to swing back up, bringing with them interest rates.
As a result, Santander and TSB followed in the footsteps of Coventry and Accord Mortgages on Wednesday, by increasing their fixed price deals by up to 0.31 percentage points and 0.3 percentage points respectively.
By Thursday, fellow lenders had jumped on the bandwagon, Moneyfacts reported a big shift overnight on the average fixed rate. 2-year fixed residential mortgages rose to 5.48% from 5.44% and the average 5-year fixed residential mortgage rate increased to 5.21% from 5.17%.
Those looking to lock in a good deal in the foreseeable had better get cracking.
Picking holes
The daughter of a Georgian billionaire and her husband are suing the seller of their Notting Hill Mansion for £36m after they found their home was infested with moths. These cunning culprits are currently residing in the wool-insulated walls of the property and refusing to vacate causing damage to the heiress’s clothes and husband’s wine collection. The seller, however, is pleading innocence as when asked if there had been any previous issues with “vermin” his solicitor, at the time of sale, claimed moths do not identify as such.
Only in PCL!
RICS Residential Survey reports price increases
In the latest RICS Residential survey for October 2024, prices appeared to be creeping up in every area of the UK with the exception of Yorkshire and the Humber, and the South West, with figures indicating decreasing prices (-23% and -4%, respectively) This northern-led boost to prices is expected to continue over the next few months with southern regions trailing behind.
Despite a rise in agreed sales and listings, demand held firm but didn’t increase in October, as many buyers are now facing higher rates for longer in response to economic forces “trump”ing from the west and increased taxes in Blighty, stoking inflation.
Looking at the rental sector – increases in rates and overall costs now, and in the EPC future have meant more landlords are jumping ship despite demand steadily increasing. The budget saved Landlords from capital gains increases enabling those who want out while restraining investment by increasing stamp duty. Given this, a net balance of +33% of respondents expect rental prices to rise over the next 3 months.
Galliard homes takes a hit
London-focused developer Galliard Homes took a £11.3m hit to its pre-tax profit in its end-of-year results, marginally less than the preceding year’s £12.8m. The developer, unlike others, who have been waxing lyrical about their “optimism” for the future, expect the housing market to “remain challenging during the rest of 2024 and 2025.”
Construction output in September 2024
Homeowners get their house for winter or to be ready to list in the Autumn. Monthly construction output in the ONS Construction Output Price Index estimated growth of 0.1% in volume terms in September 2024; lead by an increase in repair and maintenance (0.4%) as new work fell by 0.2%
Asian buyers prop up the PCL market as EU members look elsewhere
According to Hampton’s research Indian and Chinese buyers who are looking to escape the summer heat back at home or educate their offspring abroad are making the most of recent price “adjustments” to snap up a base in the capital.
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Section 21 notices on the rise
Bailing Landlords looking to exit before section 21 notices are abolished next year have led to an increase in eviction notices between July and September to 8,425 from 8,317 between April and June. In reaction, the Law Society called for a £4.3m legal aid boost for renters.
And that concludes another UK Property News Recap – 15.11.2024. If you have any comments or suggestions, please get in touch here
