Twindig Housing Market Index (HMI) - 18 September 21
The Twindig Housing Market Index rose by 1.0% to 93.3 this week. Strong performance and bulging forward orderbooks reported by housebuilder Redrow this week and continued competition in the mortgage market led to an increase in investor confidence in the UK housing market. Confidence did, however, reduce in the estate agency due to concerns that continued stock shortages today may impact financial results tomorrow, although many were mindful that the shortages in homes for sale continue to underpin house prices. We also suspect that Michael Gove, the new housing minister will have a vested interest in seeing higher rather than lower house prices.
Bullish trading performance from Redrow this week, its decision to exit London and focus on family housing outside of urban centres is paying very well into the 'working from home' theme and it appears that WFH will be with us for the longer term.
Whilst a hybrid model is likely to emerge it appears that now that employees have been released from the office it will be difficult to get them back in for five days a week. The reduction in commuting time (and cost) is a good result for work-life balance and it is pleasing to see that some good can come out of the disruption caused by the COVID-19 pandemic.
The Land Registry reported that house prices fell in July, this was not a surprise as it coincided with the first month following the reduction in the Stamp Duty Holiday benefit and we can expect another dip in October, in our view. However, once the Stamp Duty Holiday impact has unwound we expect to see upward momentum return to UK house prices.
Plenty of work for Michael Gove the new Housing Minister to do as he takes over from Robert Jenrick. It is good to have a 'big hitter' in the department although his initial focus may be on trying to hold the Union together and keeping the Kingdom United rather than dealing with the greenbelt and planning regulations. However, we expect he will have a keen eye on house prices and work hard to keep them rising to keep his homeowning voters onside...