F&C Regional Marketing Reports February 2022 - North East

FEBRUARY 2022

N O R T H E A S T M A R K E T U P D AT E

KEY STATS N O R TH E A S T

£400,000

£541,478

9.64%

£261

£1.34bn

63

LATEST DATA

QUARTERLY CHANGE

ANNUAL CHANGE

71,015

-7.1%

-29.9%

RESIDENTIAL TRANSACTIONS (MTH)

100,110

-18.5%

-20.0%

GROSS MORTGAGE LENDING (MTH)

£21.7 bn

-7.5%

-10.8%

NEW HOME STARTS (QT)

38,070

1.3%

23.4%

NEW HOME COMPLETIONS (QT)

32,930

-9.2%

-4.5%

MORTGAGE APPROVALS (MTH)

2 I PREMIUM MARKETS I NORTH EAST

MARKET OVERVIEW NF SCHA SE WAIU NTDUSMO H ADNEG Brexit the budget havetodominated headlines pasttowards quar ter,the andspring. while the Buyer and demand continues outpace new supply over as wethe head latter provided fewdrivers fireworks for the realand estate market, deal or no deal question The fundamental of more space a change ofthe lifestyle, aided by hybrid continues to linger.However Rhetoric economic has been more positive recent weeks; all the eyesmarket are on working, remain. headwinds areinblowing and maynow calm the EU year summit in mid-November. Despite the uncer tainty, annual house price growth as the progresses. remains positive across England and Wales, except London, although transaction levels remain muted.

A YEAR LIKE NO OTHER

With mortgage approvals and lending at levels not seen since

WATCHING WAITING 2007, and close AND to 1.5 million properties changing hands¹, 2021

proved a year like no other for the in housing market.

Even with There was positive economic news the Budget: eight over 560,000 sales excluded from taxation due to the stamp years of economic growth, 3.3 million new jobs since 2010 duty holiday in England and an estimated 60% of purchases with 800,000 more forecast by 2023, and wage growth at in benefitting from aa reduction in taxation (January-June), itsWales highest level in nearly decade. Independent forecasts £9.5 billion was collected in residential receipts. from the Office for Budget Responsibilitytax (OBR) alsoThis was up by over 50%toonfall2020 a 12% rise on 2019². predict inflation backand to the government’ s target of 2% over the course of 2019. However, sales volumes Prime market properties attracted significant 20,000 remain low, down 2.9% across the North East interest. in the twelve property sales priced £1 million or more were completed, months to June compared to a year earlier. After a brief more than in the any summer year since Registry records began. reprieve over theLand number of mortgage With travel corridors of the summer and the approvals across the UKopen has for alsomuch slowed. autumn, the UK has seen a return of overseas buyers; 8,500 House priceacross growth acrosshave muchbeen of the UK istoslowing. purchases England subject the additional However across the North East price growth remained in 2% non-resident stamp duty land tax since itshas introduction stable. Annual house price growth in the year to August (UK April 2021. A third of all taxation-liable purchases in the final HPI) was 2.9%, unchanged from a year earlier. Across the quarter of 2021 were subject to the additional 3% higher rate prime market annual price growth was just 0.5% over the additional dwellings tax. past year.

BUDGET WINNERS IMBALANCE AND LOSERS DEMAND-SUPPLY Housebuilders and first-time buyers were the main real A demand-supply imbalance epitomised the market in 2021, estate beneficiaries of the Autumn Budget. As the underpinning property price growth. 2022 has started in government aims to meet its ambitious 300,000 new homes a similar vein. At 11.2 %,ofNationwide report annual price per year target, a range initiatives were announced. growth in the year to January represents the Additional monies totalling £500 million for thestrongest Housingstart to a year since The average price ofnew a property to deliver 650,000asking new homes, Investment Fund2005. coming to market registered its strongest rate of partnerships with Housing Associations, removal ofgrowth the since May (Rightmove). there are indications new revenue cap2016 for local councils While and a business-backed supply willscheme enter the shortlyare with home valuation guarantee for market SME builders allnew in the pipeline. requests on the rise, a significant proportion of properties As too is large-scale infrastructure investment and moves to on surveyorthe books ‘soldwith subject to contract’.

Continued reinvigorate highare street, proposals to allow lack of supply is constraining the to sales pipeline.and At just below conversion of unused retail units residential changes to business rates relief for small businesses.

£150,000, the average price of a property in the North East is 16% more expensive than at the start of the pandemic. In monetary terms, this is equivalent to a rise of close to £21,000 be extended until the end of March 2023, with the value of (Dataloft, UK HPI). the loan subject to a new regional cap. Across the North East the cap will be £186,100. Based on an analysis of new Houses remain a popular choice, but with an increase in build property sales over the past year just under half (49%) international travel and a return to the office at least part-time would have been available to prospective first-time buyers. for many, the apartment market is also seeing a resurgence The SDLT relief introduced for first-time buyers in the 2017 of interest. Relative affordability is an increasingly important Budget will also be extended to all those who purchase a concern, and it is perhaps no surprise that it is locations in the shared-ownership property. Those who have purchased a North West, East Midlands Yorkshire and nd November shared property since 22and 2017the willHumber also be thatable are to currently experiencing the strongest levels of property claim the relief retrospectively. price inflation (Zoopla).

The government is also going to consult on reforms to lettings relief which looks set to impact on many so-called ECONOMIC CHANGE ‘accidental’ landlords. Non-resident buyers will face a 1% SDLT surcharge over above all other costs.

As additional the UK economy tracks back to and pre-Covid levels, rise, itpositive, is less than the 3% Although this is yet another expectations for growth in 2022tax remain despite indicated by pared the government earlier this autumn. forecasts being back in recent weeks.

The IMF predict the UK economy will strengthen by 4.7% over the course of this year; the EY ITEM Club 4.9%. Strong inward investment and THE VALUE OF byPRIME a robust jobs market are key factors supporting the growth.

HM Treasury netted £105 million in stamp duty receipts (SDLT) from the North East in the year to thethe end of Savings accumulated by many households during COVID-19 March 2018, up 10.2% on a year previously, aided by lockdowns are thought likely to help subdue the shock ofa rise in sales volumes of 2.3%.

Just under one (24%) rising energy, food and fuel prices.

Inflation is quarter set to reach 7%of receipts were attributed to the purchase of additional or higher this spring, with predictions that the base rate of properties, with £35 million raised from the 3% additional interest will climb to 1% over the course of the year. Although levy alone. Just under 15% of all residential taxation receipts this would be the highest rate since March 2009, it is still low were attributable to properties purchased for over by historical standards. Rising costs may well act as soft brake £500,000. on the property market, but with buyer demand continuing to outpace supply, pressure prices looksproperty set to remain at least The average price for on prime market exceeds in the short term. £500,000 in two areas across the North East: Newcastle and Durham. The prime markets across South Shields and Bishop Auckland areHMRC currently experiencing the highest level ¹ Dataloft, Bank of England, of price growth; ² Dataloft, HMRC, Stats average Wales prices of prime property have risen by 13% and 7% respectively over the past year.

With first-time buyer numbers at an all-time high, rumours that the Help to Buy Equity scheme would be scrapped post April 2021 proved unfounded. Instead the scheme will PREMIUM MARKETS I NORTH EAST I 3

PREMIUM MARKETS T OP 5 % B Y R EG I O N

£400,000 £541,478 +9.6% £261

£507,000 £706,845 +13.5% £338

£498,000 £680,181 +14.6% £322

£566,000 £759,175 +12.5% £361

£515,000 £675,592 +9.5% £303

£455,000 £593,700 +12.0% £298

£718,000 £976,599 +8.4% £449

4 I PREMIUM MARKETS I NORTH EAST

£784,000 £1,069,604 £1,069,919 +8.4% £510

£927,000 £1,340,020 +7.4% £548

£1,500,000 £2,414,000 –3.3% £1,134

TOP 5% N O R TH E A S T P R EM I U M M A R K E T

£449,000 £643,241 +13% £291

£400,000 £534,678 +16% £282

£312,000 £391,514 +13% £223

£365,000 £471,156 +7% £249

£315,000 £411,670 +10% £186

£470,000 £598,775 +3% £285

£262,000 £333,825 +11% £191

£387,000 £506,675 +25% £214

£375,000 £491,914 +11% £253 £370,000 £473,928 +5% £240

£394,000 £507,929 +8% £249 PREMIUM MARKETS I NORTH EAST I 5

TOP 5% N O R TH E A S T P R EM I U M M A R K E T

PROPERTIES SOLD ABOVE THE PREMIUM PRICE THRESHOLD

The premium price threshold is the value over which the top 5% of property sales occur. The chart shows a rolling 12 month change in the average price paid for premium properties compared to the previous 12 month.

NORTH EAST

20%

15%

10%

5%

0% JAN 2021

FEB 2021

MAR 2021

APR 2021

MAY 2021

JUN 2021

JUL 2021

AUG 2021

SEP 2021

OCT 2021

NOV 2021

DEC 2021

Source: Dataloft, Land Registry

BY PROPERTY TYPE OVER THE LAST 12 MONTHS, PROPERTIES SOLD ABOVE THE PREMIUM PRICE THRESHOLD

An individual premium price threshold is calculated for each property type based on sold prices in the last 12 months. The chart shows the average price paid per square foot for all of these premium properties.

NORTH EAST

£320

£287

£283 £240

£266

£261

£243

£160

£80

0 FLAT/APARTMENT

TERRACED

SEMI-DETACHED

DETACHED

ALL PROPERTY Source: Dataloft, Land Registry

6 I PREMIUM MARKETS I NORTH EAST

MAINSTREAM N O R TH E A S T M A I N S T R EA M M A R K E T

ALL PROPERTIES SOLD ACROSS THE REGION

Chart shows a rolling 12-month change in transactions compared to the previous 12-month period.

PLEASE NOTE: Caution should be taken when viewing this chart due to the continued delay in recording Land Registry sales.

NORTH EAST

Transactions

20%

Average sales price

10%

0%

-10%

-20% DEC 2020

JAN 2021

FEB 2021

MAR 2021

APR 2021

MAY 2021

JUN 2021

JUL 2021

AUG 2021

SEP 2021

OCT 2021

NOV 2021

Source: Dataloft, Land Registry

BY PROPERTY TYPE OVER THE LAST 12 MONTHS OF ALL PROPERTY SALES

NORTH EAST

Average price paid per square foot for all property transactions.

£240

£209 £180

£158 £120

£141

£136 £107

£60

0 FLAT/APARTMENT

TERRACED

SEMI-DETACHED

DETACHED

ALL PROPERTY Source: Dataloft, Land Registry

PREMIUM MARKETS I NORTH EAST I 7

KEY STATS N O R TH E A S T

£134,804 £400,000 £541,478

£92,962 £251,086 £332,360

£97,385 £294,500 £395,691

£144,216 £319,087 £426,327

£275,150 £601,826 £841,805

£140,061 £414,854 £559,521

T: +44 (0)207 079 1515 E: parklane@fineandcountry.com fineandcountry.com

Disclaimer :This repor t is produced for general information only.Whilst ever y effor t has been made to ensure the accuracy of this publication, Dataloft Ltd accepts no liability for any loss or damage of any nature arising from its use or from any changes made to Dataloft content by Inform users. Reproduction of all or par t of the repor t in any form is prohibited without written permission from Dataloft Ltd. Repor t edited by Inform user and published on 07-02-2022.

Please note, HM Land Registry transaction figures since March are lower than usual due to the impact of Covid-19. They are likely to be revised upward. dataloft.co.uk