National Property Market Summary 2019

Mon, May 20, 2019

The latest RICS UK Residential Market Survey has been published. We wanted to share with you a summary of the results...



TRANSACTIONS
Seasonally adjusted there were 101,830 property transactions across the UK in March 2019, 6.9% higher than a year ago, and the highest monthly total since July 2017, according to data released by the HMRC.

Nearly half (49%) of major UK towns and cities witnessed a boost in new property listings in the latter part of April following the announcement of the Brexit extension. New listings in April were up by 0.8% from March according to the latest Housesimple's Property Supply Index.

The RICS expect the restricted supply of properties available to buy along with decreased buyer demand to impact sales levels over the next three months.


DEMAND
Demand for properties fell again in April according to the RICS for the ninth consecutive month. The pace of decline was similar to March and affected virtually all parts of the country.

The Bank of England predict mortgage approvals will average 60,000 per month for 2019, down from an estimate of 65,000 per month in February. In 2018, mortgage approvals averaged 65,000 per month.

The Financial Conduct Authority has proposed loosening its affordability checks for so called 'mortgage prisoners', those homeowners who are stuck on high interest loans with firms who have either ceased trading or are unauthorised to make new loans. It is estimated there are 150,000 'mortgage prisoners' across the UK.


INVESTMENT/LETTINGS
Average rents paid by UK private tenants grew by 1.2% in the year to March, a slight pick up in the annual rate of growth recorded in February. Rental growth is currently strongest in the East Midlands followed by Yorkshire and the Humber.

England’s new Client Money Protection (CMP) legislation became law on April 1st. It requires all letting agents in England to be members of one of six approved CMP schemes. Agents must also hold client money in a separate bank account, have appropriate indemnity insurance and establish money handling procedures.

With demand levels remaining firm while the availability of properties to rent continues to decline, the RICS project that average rents will rise by around 2% in the next 12 months and increase to 3% per annum over the next five years.


DEVELOPMENT/NEW BUILD
220,000 new dwellings have been added to the housing stock in England in the year to April. This figure is only just below the recent high of 224,000 reported in 2008.

There were 140,000 build-to-rent units complete, under construction or in planning at the end of Q1 2019, a 13% rise on Q1 2019, according to Savills. There are now over 30,000 completed build-to-rent units across the UK.

The House of Commons committee on Leasehold reform advocate a wholesale shift away from leasehold to common-hold ownership along with capping ground rent (£250 p.a) and introducing the a standardised key features document for prospective purchasers of new build leasehold properties.


PRIME MARKETS
Molior report that a record 31,500 units currently under construction across the capital are unsold, equating to nearly half of all units (66,000) currently underway. 21% of all units are for BTR. Only 4,800 units completed during Q1 2019, compared to a quarterly average of 5,900 during 2018 and 5,600 during 2017.

The government is currently seeking views on the of EU’s Fifth Money Laundering Directive which would require high-end lettings agents dealing with rental deals of €10,000 per month or more to undertake due diligence on prospective tenants. The consultation is open until 6th June.

There are around 87,000 properties, with a combined value of over £56 billion, across England and Wales owned by anonymous companies registered in tax havens, with a combined value of over £56 billion, 40% are in London. Westminster is home to around 10,000 such properties, Kensington and Chelsea over 5,700.
 

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