UK Residential Market Update
A change of Government comes as average UK house prices continue to moderate. Meanwhile, pent-up demand is still building in prime London and country markets
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Economic and housing market insight
The new prime minister Boris Johnson put housing firmly on his ‘to-do’ list within 24 hours of being appointed in his first address to Parliament. While Brexit planning will be a top priority, the government will also want to make an impact on other key issues, while the prospect of another election looms.
The ministerial reshuffle saw Esther McVey appointed as the tenth housing minister in ten years (as shown below). However, the industry disappointment of yet another change in leadership from a policy point of view was somewhat offset by the fact that Ms McVey will have a seat at the cabinet table, underlining the importance of housing to the new Government.
Robert Jenrick replaced James Brokenshire as secretary of state for Housing, Communities and Local Government, and it has also been reported that Sir Edward Lister, a housing and planning veteran who has been helping Mr Johnson with his leadership election campaign during a leave of absence as Chairman of Homes England, may be staying on to advise the prime minister. This adds up to a hefty housing presence in the Government.
Prime markets
Average property values in prime central London fell by 0.2% in July, taking the annual change to -4.8%, a moderation from the 5.1% decline seen in March. In prime outer London, average prices are down 3.7% on the year, compared to an annual decline of 4.8% in December last year.
In prime country markets, average prices ticked up by 0.1% in Q2, taking the annual change to -2.3%. As in the prime London market, the number of new applicants continues to rise, but this is set against a decline in new homes being put up for sale. Any political clarity is likely to release both demand and supply in this market.
KEY MARKET FACTS:
Average UK residential prices rose 1.2% in the year to May, according to the ONS
Prime central London prices down 0.2% in July, taking the annual change to -4.8%
Prime central London rents were up 0.5% in July, taking the annual change to -0.5%
Average UK rents rose by 1.3% in the year to June, according to the ONS