News

Modest fallback in house prices

Annual house price growth slowed to 10.5 per cent in July, from the 17-year high of 13.4 per cent recorded the previous month. In month-on-month terms, house prices fell by 0.5 per cent, after taking account of seasonal effects, following a 0.7 per cent rise in June.

Commenting on the latest figures from the Nationwide Price Index, the building society’s chief economist, Robert Gardner, said: “The modest fallback in July was unsurprising given the significant gains recorded in recent months. Indeed, house prices increased by an average of 1.6 per cent a month over the April to June period – more than six times the average monthly gain recorded in the five years before the pandemic.”

The tapering of stamp duty relief in England is also likely to have taken some of the heat out of the market. The nil rate band threshold decreased from £500,000 to £250,000 at the end of June, and will revert to the original figure of £125,000 at the end of September. 

“This provided a strong incentive to complete house purchases before the end of June, especially for higher priced properties,” Mr Gardener said. For those purchasing a property above £250,000, the maximum stamp duty saving reduced from £15,000 to £2,500 after the end of June.

The stamp duty changes drove the number of housing market transactions to a record high of almost 200,000 in June as home buyers rushed to beat the deadline. This was around twice the number of transactions recorded in a typical month before the pandemic and eight per cent above the previous peak seen in March.

30 July, 2021

Average UK house price up 10%

UK house prices increased by 10 per cent in the year to May 2021, up from 9.6 per cent in April 2021. The average UK house price is £254,642.

On a non-seasonally adjusted basis, average house prices increased by 0.9 per cent between April and May 2021, compared with an increase of 0.5 per cent during the same period a year earlier.

House price growth was strongest in the North West where prices increased by 15.2 per cent in the year to May 2021, with the lowest annual growth in London, where prices increased by 5.2 per cent.

The Royal Institution of Chartered Surveyors’ May 2021 UK Residential Market Survey reported that increasing demand and a decrease of new instructions continues to drive house prices higher.

The Bank of England’s Agents summary of business conditions 2021 for the second quarter reported ongoing strong demand for housing across most of the UK and a shortage of properties for sale, which pushed up prices.

Average monthly price by property type.

 

The UK Property Transactions Statistics showed that in May 2021, on a seasonally adjusted basis, the estimated number of transactions of residential properties with a value of £40,000 or greater was 114,940. This is 138.2 per cent higher than a year ago. Between April and May 2021, UK transactions decreased by 3.8 per cent on a seasonally adjusted basis.

The Bank of England’s Money and Credit May 2021 release reported that mortgage approvals for house purchases (an indicator of future lending) in May 2021 was 87,500, which is up slightly from April 2021 but lower than a recent peak of 103,400 in November 2020.

14 July 2021

FMB warning despite surge in construction sector

The fastest rise in construction activity since 1997 risks being undermined by price increases and a shortage of building materials, warns the Federation of Master Builders. 

Commenting on the latest figures from the Purchasing Managers’ Index (PMI), FMB chief executive Brian Berry said: “The building materials shortage is disproportionately affecting small builders and threatening their recovery from the pandemic despite strong growth in the construction sector.” 

“The materials shortage is proving a serious detriment to both businesses throughout the supply chain and consumers. As the country reopens for business, it’s imperative that building firms have better access to the materials they need to build,” he said.

The recovery in UK construction output gained further momentum in June, according  to  the  latest  PMI  data. Overall construction activity expanded at the fastest pace for 24 years, supported by  another sharp rise in new orders. Delivery times lengthened to the greatest extent since the survey  began, surpassing the previous record set in April 2020. 

Severe shortages of construction products and materials resulted in a survey-record rise in purchasing prices in June. Sharp increases in business activity were also seen across the main areas of the construction sector monitored by the survey. 

Construction work in the housebuilding category increased at the fastest pace since November 2003. Adding to cost pressures in June was the steepest rise in rates charged by sub-contractors since the survey began. 

Construction companies remain optimistic about growth prospects for the next 12 months. However, the degree of confidence eased to its lowest since January, in part reflecting concerns about labour availability and the sustainability of the recent surge in demand. 

7 July 2021

Suggestions Sought for New Housing Problems

The House of Lords Built Environment Committee is inviting written contributions on how the demand for new housing can be met.

The cross-party committee will consider the key factors shaping the type, tenure and quality of housing needed in the UK. It will also consider a range of challenges to meeting that demand including skills shortages in construction and some aspects of the planning system.   

The committee, chaired by Baroness Neville-Rolfe is looking at the following:

• The composition of the housing sector and how it is structured in terms of private ownership, privately rented accommodation and social housing.

• The social and demographic factors shaping housing demand and future trends.

• If the government’s target of 300,000 new homes per year accurately reflects housing demand and if it is achievable.

• The type and tenure required of new homes.

• What can be done to ensure a good balance of new homes where they are needed.

• How the construction sector can meet housing demand and the barriers facing the sector.

• How the planning system can be shaped to meet housing demand. 

• The role of Permitted Development Rights.

• Changes to Section 106 agreements to shape the provision of social housing.

• Community engagement in the planning process.

• How the design and aesthetics of new homes can be improved.

• What can be done to overcome skills shortages in the construction, planning and design sectors.

Submissions close on September 10. 

30 June, 2021

New Apps to Make Planning Applications Easier

Housing secretary Robert Jenrick has announced the creation of two apps to help homeowners improve and extend their homes.

The apps are intended to save time with planning applications and simplify the process, making it more digital-friendly as outlined in the government’s white paper Planning for the Future, published last August.

Kitchen extensions and loft conversions, for example, don’t need to go through the full plan process, but the government said the rules are “complicated and often result in people submitting invalid applications for Permitted Developments wasting time and money”.

The app for homeowners, Ripa (Reducing Invalid Planning Applications) uses simple language and diagrams to help applicants navigate the system. 

It asks questions and then determines whether the plans meet local and national requirements.

Users can apply within the app for the certificate needed to prove that their plans are Permitted Development.  

The second app, BoPS (Back office Planning System), is to help planning officials manage Permitted Development applications, including by tracking progress, so planners can make decisions more quickly and efficiently.  

The apps are being tested in three areas: Southwark and Lambeth in London, and Buckinghamshire.

June 30, 2021

Showcase of Sustainable Construction

A showroom focusing on sustainable design and construction has opened in Marylebone in London. 

EDGE (Eco Design Green Environment) will showcase green brands and serve as an environmental hub where eco-conscious suppliers and specifiers such as construction companies, architects and interior designers can connect.  

The 2,400 sq ft centre will display cutting-edge solutions considered at the forefront of the sustainable design movement. 

Spanning three floors, EDGE offers an evolving, design-centred showcase of educational and aesthetic materials, collaborative workspaces, with on-hand advice for professionals and the public.  

George Papatheodorou, CEO of EDGE, said:  “At a time when the debate surrounding humankind’s impact on the earth, its climate and the people who inhabit it continues to intensify, it is more important than ever that we have a responsible attitude to material specification. 

“To do so requires makers and manufacturers to take a considered approach to sustainability.

“We do not believe that materials designed to reduce their negative social and environmental impact should ever hinder innovation - if anything, they should enhance it.” 

The hub will host both large, established brands as well as small independents, offering everything from walls and floor materials to sustainable furniture. 

30 June, 2021