Weekly Round-Up, 10th August 2018
Stamp it out
121,500 first-time buyers have saved a total of £284,000,000 taking advantage of the government’s cut to stamp duty, according to statistics released this week which cover the period until 30th June this year. Over the next five years, it is estimated that the government’s flagship housing policy will help over 1 million people getting onto the housing ladder.
First time buyers purchasing homes of £300,000 and under now pay no stamp duty at all, and those who have bought properties of up to £500,000 will also have benefited from a stamp duty cut.
This is part of the government’s long-term commitment to make housing more affordable. As part of the Autumn Budget housing package, the Chancellor announced at least £44 billion for housing – which includes at least £15.3 billion of financial support for house building over the next five years – and an aim to build 300,000 new homes a year in the areas that need it, as well as encouraging better use of land in cities and towns.
In addition to government-backed schemes such as the Help to Buy equity loan and Help to Buy ISA, those hoping to make their money go further can open a Lifetime ISA – to either save for a first home, or for later in life.
House price growth
According to the latest research by the Halifax, house prices picked up in July, with the annual rate of growth rising from 1.8% in June to 3.3% in July, the largest increase since last November. The average house price is now £230,280, the highest on record.
According to the Lender house prices in the three months to July were 1.3% higher than in the previous quarter, the fastest quarterly increase, again, since November. While the quarterly and annual rates of house price growth have improved, housing activity remains soft. Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year.
In its commentary the Halifax highlight that in contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May with much of the job creation driven by a rise in full-time employment. Pressures on household finances are also easing as growth in average earnings continues to rise at a faster rate than consumer prices. With regards to the recent rise in the Bank of England Base Rate, we do not anticipate that this will have a significant effect on either mortgage affordability or transaction volumes.
Time to put the rent up?
The most striking feature of the July 2018 Royal Institute of Chartered Surveyors (RICS) survey is the continued reduction of new property being put on the market in the lettings sector with 9% more members and responders seeing a fall rather than rise in New Landlord Instructions. This is the eighth consecutive quarter in which this RICS indicator has recorded a negative number.
This pattern reflects the shift in the Buy to Let market in the wake of tax changes which are still in the process of being implemented, as smaller scale landlords exit the sector. Significantly, the drop in instructions is evident in virtually all parts of the country to a greater or lesser extent.
While the supply of fresh rental stock to the market is increasingly constrained, the Tenant Demand indicator remains resilient. The upward momentum appears to have slowed, but the number of tenants looking for a new home remains in positive territory at a headline level.
One consequence of this imbalance is that expectations for rental growth, and rising rents for consumers, appear to be strengthening again. Over the next twelve months, rents are projected to increase by a little short of +2% nationally, but the shortfall in supply over the medium term is expected to force a cumulative rise of around +15% (based on three month average of responses) by the middle of 2023. East Anglia and the South West are viewed as likely to see the sharpest growth over the period.
According to the latest research from the Office of National Statistics, there were 533,253 deaths registered in England and Wales in 2017, a 1.6% increase from 2016 and the highest number registered annually since 2003. Age-standardised mortality rates (ASMRs) decreased for both sexes in 2017; by 0.4% for males and 0.2% for females. Both the number of deaths and age-specific mortality rates for people aged 90 years and over increased in 2017, by 4.4% and 2.9% respectively; most notably for females.
Demonstrating that more people are dying with cancer rather than as a result of cancer ASMRs for cancers, respiratory diseases and circulatory diseases continued to decrease in 2017, whilst rates for mental and behavioural disorders, and diseases of the nervous system increased by 3.6% and 7.0% respectively. The City of Kingston upon Hull replaced Blackpool as the local authority with the highest ASMR rate in England in 2017, increasing by 7.1% from 2016.
The infant mortality rate increased for the first time in five years to 4.0 deaths per 1,000 live births; the neonatal rate also increased by 3.6% compared with 2016, whilst the post neonatal rate remained the same.
The research shows that the population is both growing and ageing and when you take those things into account, mortality rates decreased slightly from 2016 to 2017, for both males and females. Mortality rates for cancers, respiratory diseases and circulatory diseases have also decreased, however, rates increased for mental and behavioural disorders, such as dementia, and diseases of the nervous system, such as Parkinson’s and Alzheimer’s. This could be partly linked to a better understanding of these conditions, which may have led to better identification and diagnoses. The number of infant deaths decreased in 2017, but because the number of live births decreased more significantly, the infant mortality rate rose for the first time in five years.