With Christmas decorations appearing in the shops, dark evenings drawing in and the end of the year rapidly approaching, here's a quick sum up of the latest housing news and views to round off what has been quite a year, one way and another.
Prices have certainly risen far more than anyone predicted. According to the latest figures from the Nationwide Building Society, house prices are up 14% year on year, with what they call a 'race for space'. It's been a far from even rise across the country though. Cornwall and the West Country have seen an incredible boom market mirrored elsewhere in suburban and rural markets. In contrast, the inner cities and London have been feeling the effects of Covid with activity and prices in the relative doldrums. London still leads the charge over the last 13 years though, with prices up 70% in that time in the best performing London boroughs. Compare that with parts of the North. It's worth remembering, that even with these latest price rises, house prices in some areas still remain below the levels of 2008 - before the financial crisis, with Hartlepool (-7.8%), Middlesborough (-4,3%) and County Durham (-1.7%) standing out. Of the top 20 areas for price rises in the last 13 years, only two (Cambridge and St Albans) are outside the M25. London will surely catch up some of the ground it has lost next year.
Rents are rising too. The latest figures from Zoopla show annual rental growth reached 4.6% in the third quarter with rents hitting an average of £968. When London is excluded, average rental growth across the country was 6%, at or near a 10-year high across most UK regions. London rents have returned to growth after falling for 15 consecutive months, with an increase of 4.7% between June and September as offices reopened and workers returned to the city. However, London rents are still 5% lower than they were at the start of the pandemic.
Zoopla forecasts further rental growth in 2022 of 4.5% fueled by the undersupply of rental properties and the strength of the employment market.
Rightmove reports that asking prices for new properties coming on to the market fell by 0.6% last month. However, we often see average prices slipping at this time of the year as less large properties come to market. Overall the market is still very short of new listings and it remains strongly a 'sellers market'. People are reluctant to put their own house on the market if they can't see anything available to buy. It's the wrong way round, as we always encourage sellers to sell first to be in the best buying position - but it's the truth of the current situation. More stock needed!!
The conveyancing industry has been in crisis all year long as the number of transactions has exceeded their capacity. Typically moves are taking up to 6 months to go through - 3 months longer than they should, in a properly functioing market. This is despite the best efforts of our own staff and other agents to push things along.
Now even more problems have come to light with a more than week-long IT outage at Simplify Group – affecting transactions at the conveyancing firms of Premier Property Lawyers, My Home Move, Advantage Property Lawyers, JS Law and DC Law. These firms are some of the biggest conveyancing lawyers in the market and their IT systems seem to have been the victim of a hacking incident. Whatever has caused it, doesn't disguise the chaos it has caused for thousands of deals and clients. We hope this get fixed very soon and that legal capacity gets sorted out for 2022. We don't want a repeat of this year.
Mortgages have never been cheaper. We have seen 5 year fixed rate mortgages for borrowers with big deposits at less than 1.5% in recent weeks, and 2 year fixes for higher percentage loans are still around 2.5% even now, as rates have crept up in the money markets. Even if bank rates go up in 2022, we still see cheap mortgages being plentiful next year which will drive the market forwards.
Our predictions for 2022 will be published in a couple of weeks, but (spoiler alert) we think prices will certainly not fall back during 2022. Watch this blog for more details.