Houselungo 20 June 21
A lungo length look at this week's housing market news
House prices fell in April...
The Land Registry released its House Price data and Index for April this week and it bucked the recent trends in house price growth....
What they said
Average UK house price £250,772
Increase over the last year 8.9% or £20,454
House prices fell by 1.9% or £4,935 during April
Twindig Take
The latest Land Registry data suggests that UK house prices fell by 1.9% in Apr 21 to £250,772, good news for buyers, but not really bad news for sellers as the increase in the year is still more than £20,000 (c. £1,700 / month). The land registry data relates sold house prices, so the small reduction, in our view, will have reflect prices agreed by those who thought they might miss the 31 March 2021 Stamp Duty Holiday deadline. Following the stamp duty holiday extension, we expect the house price data over the coming months show more ups than downs.
The regional picture
House prices fell in all but one region of England and rose in Wales in April 2021, to find out how much house price changed in your region you can read our article below
London house prices by borough
The latest data from the Land Registry shows that the average house price in London fell by 2.0% or £10,073 to £491,687 in April 2021. During April 2021 house prices rose in 19 of the 34 London boroughs. We expect that the house price falls relate to the initially scheduled end to the Stamp Duty Holiday and would expect house prices in London to rise in the coming months.
The biggest falls were in Kensington and Chelsea where average house prices fell by £97,245 followed by Brent down £30,350, and Islington down £28,151.
The biggest London house price gains last month were to be found in the City of London up £50,804, Harrow up £16,886 and Lambeth up £16,196.
For a detailed look at London house prices by borough read our article below
The 5 key drivers of house prices
The UK housing market has not only been immune to the effects of the Covid-19 pandemic it has thrived under it. Despite a global pandemic house prices have reached record levels due, in our view, to house price inflation ignited by five key drivers:
- the Stamp Duty Holiday,
- the race for space
- the increase in savings as most avenues for spending money were either closed or severely restricted
- the access to low mortgage rates for those with sizeable deposits, and
- a shortage of homes for sale
To find out why these drivers have ignited the housing market you can read our article below
Is renting a home really cheaper than buying one?
Estate agent Hamptons reported this week that for the first time in 6 years it was cheaper to rent a property than to buy it, but is this really the case, Twindig investigates
What Hamptons found
Hampton's research suggests that before the pandemic those buying a home with a 10% deposit would have been better off than renters by £102 per month. Fast forward to March 2021 and the position has reversed with the average renter now better off by £71 per month than their homebuying peers.
But is the headline the right line?
From a purely monthly cashflow basis it is fair to say that in many areas monthly rental payments are cheaper than the equivalent monthly mortgage payment, but whilst we like to live in the moment our lives are the sum of our long-term decisions.