Docklands News

Sentiment among housebuilders has fallen, the FT reports, as concerns over the economic backdrop and rising interest rates continue to take their toll on house sales. 

Financial Times (10/09/2022)  

Nearly two-thirds of would-be first-time buyers have had to cut down their regular savings due to the cost of living crisis, according to research by Aldermore Bank. As the cost-of-living crisis takes its toll on incomes and savings, 72% of prospective first-time buyers say their attempts to purchase a property have been impacted. A third (32%) of would-be homeowners have put their property purchases on hold, anticipating delays of around 20 months. On average, prospective first-time buyers plan to save £43,500 for a deposit, according to the bank's first-time buyer index. Nearly two-thirds (64%) have had to scale back their regular savings, likely increasing the time it takes them to get on the property ladder. And while savings plans are being put on hold, mortgage rates are climbing, following a string of Bank of England base rate hikes. The average five-year fixed mortgage rate on offer for a borrower with a deposit as low as 5% was 4.49% at the end of August, according to Moneyfacts. Back in early February it was 3.35%. 

The Independent (10/09/2022)  

Homebuyers are racing to lock in a cheap mortgage deal, the Sunday Times reports, as lenders are regularly increasing mortgage rates and pulling products from the market within 24 hours of launch. Mortgage providers are having to cope with a backlog of applications as buyers and owners try to secure a deal before interest rates and house prices rise further. The Bank of England has increased the base rate six times, from 0.1% in December to 1.75% today, and this has fed through to mortgage rates. A further rise of 0.75 percentage points is expected when the Bank's committee meets again this month. The average two-year fixed rate is now 4.24%, up from 2.86% six months ago, according to Moneyfacts. This race for new deals is also fuelling the product rate rises. Many lenders have already hit their loan targets for the year and so have been quick to take deals off the market when they become overwhelmed by demand. Some have had to pause new applications because they cannot process them fast enough. To avoid this, many are putting up rates so that they do not compete with the best buys for a while. 

The Sunday Times (11/09/2022)  

The average UK house price increased by 0.4% in August, according to the latest Halifax index, hitting a new record high. Across the UK, property values were up by 11.5% annually in August. A typical property now costs a record £294,260, Halifax said – but its report warned that “a more challenging period for house prices should be expected”. Kim Kinnaird, director of Halifax Mortgages, said the latest monthly increase is “relatively modest” compared with recent times, adding: "Over the last year the rate of monthly house price inflation has averaged around 0.9%. A home in Scotland now costs a record high average of £204,362." In London, average house price has increased by 8.8% annually, marking the strongest growth there in more than six years. 

Daily Mail (07/09/2022)   The Daily Telegraph (07/09/2022)   The Guardian (07/09/2022)   The Times (07/09/2022)  

The National Association of Property Buyers has urged the new Prime Minister to address Britain’s housing crisis, calling for “radical change”. The property group said there are growing fears of a rapid slowdown in a market which is “teetering on the brink”. Spokesman Jonathan Rolande said the sector required stability in its leadership and needed widespread reform to help the soaring numbers of people unable to buy or rent a property. “We must see the supply of property increase by empowering smaller builders with easier routes to get planning. Stamp Duty is archaic and needs a re-think which would increase fairness and free up off-market property – give pensioners a zero band when they move downmarket for example,” he said. “The Government should also look at increasing tax breaks for companies opening in areas where cheap housing is plentiful to take some strain off the south east. The new PM must be bold,” he added. Mr Rolande also stressed that many landlords are “keen to exit the market thanks to new regulation and the relatively poor financial return on buy to let.” 

City AM (07/09/2022)  

Construction output in the UK dipped for the second consecutive month in August as concerns about wider economic prospects led to a fall in demand. The S&P Global Construction PMI stood at 49.2 in August – up fractionally from the previous month but still below the crucial 50.0 mark and therefore a second month of contraction. Mark Robinson, chief executive at Scape, the public sector procurement authority, said that Liz Truss must act to provide "stability" to the construction industry. "Another month of declining activity is further evidence of market uncertainty created by inflation as developers focus on getting existing projects over the finish line before pressing ahead with new ones," Robinson said. "With the construction sector's energy bills set to rise more than fivefold, industry leaders will be looking to the new prime minister to tame inflation and deliver some stability for forward planning."

Financial Times (06/09/2022)   The Daily Telegraph (06/09/2022)   The Times (06/09/2022)