The Autumn Statement pulled focus this week. Reams of speculation filled the broadsheets and tabloids columns with further analysis post delivery. The OBR’s synchronised release focused on the longer term side effects. Revealing the timeline for recent mortgage rate hikes to affect those who’ve been watching from the sidelines. This along with house price predictions, set expectations for the next 5 years.  Welcome to another UK Property News Recap.

 

Knight Frank and Bayes Business School Leasehold Data

To kick start the week Knight Frank and Bayes Business School released data revealing how house prices would be affected from phasing out the leasehold system. For 5 million leasehold properties in England and Wales it concluded that prices could increase by 10%.  Their values having previously been depressed by the feudal system, that lines freeholders pockets by clocking up time.

Nationwide Wish List

Meanwhile Lender Nationwide penned its Christmas wish list for the Government. Outlining all the things they wanted them to do to get people lending again. Got to prop up that bottom line.

Dear Government….here at Nationwide we would like….

• A review of: supply levels, planning reforms, mortgage regulations and the gap between income and house price growth.
• Re-introducing the Help to Buy ISA – increasing the amount you can save and making the redeemable bonus in line with house prices

The Autumn Statement 2023

On Wednesday, after days of speculation, Jeremy Hunt revealed the contents of his Autumn Statement. In terms of housing there were seven key takeaways.

 

 

Planning and Housing

“We will invest £32m to bust the planning backlog and develop fantastic new housing quarters in Cambridge, London and Leeds which will lead to many thousands of additional dwellings. We will allocate £450m to the Local Authority Housing Fund to deliver 2400 new homes.”

 

Local Housing Allowance increase

“I will therefore increase the Local Housing Allowance rate to the 30th percentile of local market rents. This will give 1.6 million households an average of £800 of support next year.”

 

Permitted Development Rights 

“Consult on a new Permitted Development Right to allow any house to be converted into two flats provided the exterior remains unaffected.”

 

The Mortgage Guarantee Scheme Extended

“The mortgage guarantee scheme will be extended to the end of June 2025 to “continue helping prospective borrowers with a smaller deposit buy a home”.

 

Incentivising Local Authorities to deliver speedy Planning applications

“Local authorities to recover the full costs of major business planning applications in return for being required to meet guaranteed faster timelines. If they fail, fees will be refunded automatically with the application being processed free of charge.”

 

Money to solve new build nutrient dilemma 

“We will invest £110m over this year and next to deliver high quality nutrient mitigation schemes, unlocking 40,000 homes.”

 

Money off bills if exposed to transmission infrastructure

“Up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure.”

 

Office for Budget Responsibility – Economic and fiscal outlook – November 2023

The key housing points from the OBR economic and fiscal outlook demonstrated the slow snowball effect for those with mortgages yet to feel the current interest rate hikes. 

 

 

The average interest rates “on the stock of mortgages are expected to rise from a low of 2 per cent in 2021 to a peak of 5% in 2027.” This is due to around 85%  of mortgages now being on a fixed term, with two thirds of these on a term longer than two years.

 

It also expects Housing Transactions to fall by 6.9%  in 2024 before returning to growth in “the final quarter of 2024, returning to pre pandemic levels in the first quarter of 2027.”

 

For sellers intent on getting THEIR price, it was clear they may have to wait 4 years.  “From their high in the 4th quarter of 2022 to their low in the final quarter of 2024, nominal house prices are expected to decline by 7.6% then recover SLOWLY only reaching their late 2022 peak levels in the 2nd half of 2027” 

 

O’Neill Patient Solicitors Cyber Attack

Whilst everyone was analysing the Autumn Statement and OBR release. Those on the move found themselves trapped. The CitrixBleed bug is believed to have struck again, this time targeting CTS systems affecting around 80 law firms. The LockBit software freezes critical data and in this case, transactions. Resulting in thousands of sales being unable to complete.

 

And that concludes another UK Property News Recap.

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