This week all the big names were out in force to battle for column inches. Keen to impress upon the nation their opinion and data.

Change is afoot but at what pace and when?

Welcome to another UK Property News Recap

 

Hamptons December 2023 Letting Index

On Monday, Hamptons released its December 2023 Letting’s Index. This showed average rents on new tenancies increased 10.2% year on year in November but inner London topped the leaderboard, increasing 13.2%.

In total, the rental bill for 2023 totalled £85.6bn, £8bn more than in 2022. For Londoners they contributed a record £32.1bn on rent this year, more than the total amount paid by renters in the North of England, Midlands, Wales & Scotland combined (£29.4bn). 

 

 

Increasing rents means Gen Z’s future of homeownership looks bleak as they continue to close the gap on millennials contributing £30.5bn in rent this year. As they pay more for longer, saving will be harder, leaving some unable to ever get on the ladder.

 

 

Rightmove House Price Index  December 2023

According to Rightmove’s House Price Index, the January sales started early this year with average ASKING prices dropping by 1.9% on last month. An extra 0.4% drop on the 20 year average for December. A mixture of desperation and realism causing some sellers to reprice to attract their target customers so they can also move.

 

 

Appearances can be deceiving though – according to rightmove prices are only down 1.1% on last year. Which means some sellers are still factoring in getting chipped.  This makes prices look, in most cases, outwardly more resilient than they truly are. Know your micro market!

 

UK Finance housing and mortgage market forecasts 2024-25

Taking a deep dive into the murky world of financing, UK Finance’s housing and mortgage market forecasts 2024-25 predicted a nervous year ahead.

• Lending for house purchase to fall by 8% to £120bn 
• Buy-to-let purchase lending to fall 13% to £7bn 
• Arrears to increasing to 128,800
• Possessions to increase by 16% to 5,100

Demonstrating a lot of buyers are waiting for a base rate change before making a move and being a landlord, is only for those who are cash rich. 

 

For some borrowers there is an uptick in arrears and possessions however overall they remain relatively low on previous cycles and only account for 1% of the 10.8m UK mortgages.

 

 

Zoopla December 2023 Rental Index 

Tuesday’s rental prediction came via Zoopla. The property portal expects rent growth to slow, increasing on average by 5% in 2024 with regional variations. 

London, unable to take much more, is set to only increase by 2% whereas regional cities, where there is still some financial wiggle room, larger growth is expected. .

 

 

Mortgage Lenders and Administrators Statistics – 2023 Q3

The Bank of England’s Mortgage Lenders and Administrators Statistics showed some first time buyers, second and third steppers are making tentative moves.  Buy-to-let landlords however are retreating from the market along with those who need rates to fall or believe they can time the market. Result = the value of new mortgage commitments reduced by 16.5% from the previous quarter to £51.5 bn

 

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Despite new arrears decreasing by 0.3pp from the previous quarter,, it’s clear it’s those already in trouble that are progressively sinking further under as the value of outstanding mortgage balances with arrears increased by 11.4% from the previous quarter to £18.8 bn, 44.0% higher than a year earlier.

 

 

RICS Residential Survey – December 2023

RICS residential survey showed an overall thawing on previous sales readings & expectations. The forecast for the next 3 -12mths, turning positive for sales activity. Whilst prices remain depressed they too were showing a little more resilience against their descent. The possibility of rate cuts enticing more buyers to the negotiating table, later in 2024 changing the price narrative. 

 

 

Their rental expectations however showed continued demand and supply issues over the next year increasing overall rents by another 4%

 

 

Bank of England – Base Rate Hold

On Thursday the Bank of England voted to hold rates at 5.25% for another month. Despite this and Andrew Bailey’s assurance rates were going to “stay higher for longer,”  traders continued to bet against this, pricing in a series of cuts for 2024. Goldman Sachs went a step further, predicting rates will reduce down to 3.75% by the end of the year. Who will call it right…time will tell. 

 

Ant that concludes another UK Property News Recap.

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