Housepresso 13 February 22

Published 13th of February, 2022

Level up with a logbook

Picture credit: Kelly Sikkema

Last week the Department for Levelling Up, Housing and Communities said that upfront material property information was to be mandatory in the home buying and selling process. It said that the UK Government and the industry will work together to ensure the information buyers need to know – like tenure type, lease length and any service charges – are available digitally wherever possible from trusted and authenticated sources.  Fortunately this critical information can be easily digitally provided with a twindig

House prices nudge to a new record high

Although UK house prices reached a cord high in January, they had a sluggish start to the year rising just 0.3% to £276,759 in January 2022 which came off the back of four consecutive rises above 1%. The Halifax believes it is likely that the rate of house price growth will slow considerably over the next year as the cost of living rises and mortgage rate hikes start to bite.

In our view, house prices are finely balanced. On the one hand, we agree that rising living costs and mortgage rates will temper house price growth, but on the other hand, supply shortages continue to underpin and put upward pressure on house prices.

Housing Supply Stirring

Although agents continue to report a shortage of homes to sell, it seems to us that supply is starting to stir. The latest RICS Housing Market Survey reported this week that the balance of new instructions remained in negative territory, but at its least negative since April 2021 (the month following the initial stamp duty holiday deadline). The net balance for market appraisals came in at +3%, the first time it has been above zero since June 2021 (the month of the £500,000 stamp duty holiday deadline) and market appraisals invariably lead to instructions to sell.

Mortgage rates bottoming out

It certainly seems to us that mortgage rates are bottoming out in the early stages of 2022. The average mortgage rate for a 75% LTV mortgage has now increased for the fourth month in a row, up from 1.20% in September to 1.62% in January 2022.

The average mortgage rate for a 90% LTV mortgage increased in January 2022 for the first time in over a year, the last increase was in December 2020. The rise itself was barely noticeable, a very small step from 1.95% to 1.96%, but this is likely, in our view, to mark the point of the turn.

Twindig Housing Market Index

The Twindig Housing Market Index ummed and erred this week, and eventually ticked down by 0.2% to 86.0. Investor confidence appeared torn and conflicted between robust results and trading updates from housebuilders Barratt, Bellway and Redrow, further, albeit slowing, house price growth in January reported by the Halifax and continued to shortages of housing stock in the broader market. As a result, confidence in the housebuilders moved up by 3%, but fell by 2% for estate agents. 

Housing Hailey

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