Housing Market Boom Loses Steam

The boom in Britain’s housing market cooled sharply in January as the country went back into coronavirus lockdown and a tax break for buyers neared its expiry. House price growth slowed more than expected by economists polled by Reuters and prices in London fell for the first time since July. A measure of properties hitting the market was the second-weakest on record, excluding a slump during the first lockdown last year when the sector was closed along with much of the rest of the economy. Near-term sales expectations were close to a pre-pandemic record low. New buyer enquires and agreed sales also fell. Read more on the Reuters website.

https://www.reuters.com/article/uk-britain-economy-houseprices/uk-housing-market-boom-loses-steam-rics-idUSKBN2AB00O 

Housing Set For Mid-Year Slump

But activity set to pick up again later in the year as wider economy rebounds from the pandemic.Housing is set for a mid-year slump following the end of the stamp duty holiday and the first phase of the Help to buy scheme on 31 March, according to a Construction Products Association (CPA) Survey. The end of the government schemes are expected to put the brakes on a still thriving market which was seeing higher levels of mortgage lending and property transactions at the end of last year than before the pandemic. Read more on the CPA website.

https://www.constructionproducts.org.uk/news-media-events/news/2021/january/construction-bouncing-back-despite-w-shaped-recession-and-recovery/

UK Buy-To-Let Investment Slumps 80%

Investment in buy-to-let plummeted to just £5bn in 2017 having been worth £35bn ($48.8bn, €39bn) in 2015. Changes to the tax treatment and mortgage requirements are thought to be behind the slump, which IMLA branded “excessive” and warned against “further punitive action”. As a result of the tax changes, 21% of landlords said they would be reducing their portfolio in the coming year. According to IMLA, buy-to-let landlords have been good for UK housing with adjusted rental costs in real terms falling 4.4%. Read more on the International Adviser website.

https://international-adviser.com/uk-buy-let-investment-slumps-80/

Residential Property Transactions Slumped 45% in a Quarter

Residential property transactions slumped 45% between March and April this year, according to the latest figures from HMRC. A surge in buy-to-let purchases in March to beat the April deadline for the higher stamp duty charged on additional properties was cited as a chief cause of the fall in transactions, but some industry commentators suggested uncertainty over the outcome of next month’s EU referendum was dampening the market. In April 2016 there were 84,280 residential property transactions, according to HMRC. This seasonally adjusted estimate is 45.2% lower than March 2016. Furthermore, April ‘s figure is 14.5% lower compared with the same month last year. Read more on the Housing Excellence website.

Property Market Has Peaked

The boss of one of Britain’s biggest estate agent chains appears to have called the top of the property market, saying there has been a big slump in demand from buyers after the nation has “reached the limit” on house prices. Paul Smith, whose company operates Haart, Felicity J Lord, Spicer McColl and Darlows chains across the UK, said there was “trouble in paradise” and sellers would have to cut prices to find buyers.  Smith warned that prices may be peaking after a 12% year-on-year rise to a record high of just over £234,000 for an average home, nearly nine times the average UK income. Read more on the Guardian website.

Housebuilding Slump Could Be Tackled By Council Investment

The national housebuilding slump could be halted by a council-backed programme to build tens of thousands of new homes.  Local authority leaders are urging the Chancellor to give the construction industry a shot in the arm in next month's Spending Round by removing unnecessary restrictions on council investment in new housing.  It comes as official Government figures released today show that the numbers of new homes completed in the first quarter of this year continues its downward trend.  The Local Government Association, which speaks on behalf of more than 370 councils in England and Wales, is calling for a commitment in next month's Spending Round to remove the unnecessary housing borrowing cap.  Read more on the LGA website.