Construction Products Association’s Post

UK brick deliveries are a useful proxy for house building starts in the absence of monthly starts data. Brick deliveries in June 2024 fell 1.1% compared with May and were 19.1% lower than a year ago, according to the Department for Business and Trade (Upper Chart). The decline in deliveries and starts in June 2024 was the second consecutive monthly fall and was expected as housing market demand slowed after Easter due to the uptick in mortgage rates in Spring. Plus, uncertainty due to the General Election being earlier than expected didn't affect activity down on the ground, but it may have affected consumer demand and led firms to adopt a 'wait and see' approach to new starts and focus on work in progress. So, post-election and with a significant majority so less uncertainty, there is likely to have been an uptick in deliveries and starts in July. UK Brick deliveries in June 2024 were also 30.3% lower than the average between 2018 and 2019, before the pandemic 'race for space' and Stamp Duty holiday, although it was also before the sharp rise in mortgage rates and with Help to Buy still in place.   Year-to-date (January-June) brick deliveries in 2024 were still 9.2% lower than in 2023 and 34.9% lower than at the recent peak in 2022 (Lower Chart), which was before the impact of sharp rises in mortgage rates and the resulting fall in housing market sentiment and demand. Given that the nadir of housing market demand and starts was at the end of last year and with the start of this year suffering from the poor run rate from 2023 Q4 and bad weather, even as demand rises in 2024 H2, starts overall this year are still likely to remain significantly lower than last year, especially given that house building in 2023 Q1 was still strong due to house builders meeting pre-sales made before the sharp mortgage rate rises. Looking forward, the Bank of England started to cut interest rates in August with an expectation of more cuts to come, but the initial direct effect of this on housing demand is likely to be limited given that fixed-rate mortgage rates already have interest rate cuts factored in. However, there may be a positive effect on sentiment and demand from the signalling aspect of interest rate cuts and slight falls in mortgage rates. Sustained real wage growth, now that inflation has slowed, and broader economic growth should boost housing market and house building demand from a low base towards the end of this year and gradually accelerate next year. #ukhousing #housing #ukhousingmarket #housingmarket #ukrealestate #realestate #ukconstruction #ukbuilders #construction #builders #constructionuk #buildersuk #building #ukbuilding #buildinguk #ukeconomy #constructionindustry #contractors #supplychain #constructionworkers #constructionworker #constructionwork #contractors #housebuilding #inflation #prices #buildingcontractors #growth #propertyprices #property #housing #housingmarket #housebuilding #housebuilders

UK brick deliveries are a useful proxy for house building starts in the absence of monthly house building starts data. Deliveries in March 2024 rose for the 3rd consecutive month according to the Department for Business and Trade, but they only rose by 0.6% compared with persistent rain-affected February 2024 and remained 20.7% lower than the same month a year ago (Upper Chart). Deliveries in March were also 48.8% higher than in December 2023’s nadir, but note that this nadir was a very low base, at financial crisis levels, and they were still 39.3% lower than the 2018-2019 average, which was before the distortions of the temporary 'race for space' and stamp duty holiday, the removal of Help to Buy and the rise in interest and mortgage rates. Still, deliveries have risen for 3 consecutive months in December 2023, following on, after a lag, from the slight fall in mortgage rates from peak in August 2023 and the consequent rise in mortgage approvals and then property transactions so house builders have seen an improvement in housing sentiment since the turn of the year, albeit from a low base. The profile of brick deliveries is in line with major housebuilders' view on starts, which was that activity fell away sharply in 2023 H2 before recovering this year so far but with Q1 looking very bad compared with a relatively strong year ago. House building starts this year overall will critically be dependent on the housebuilder demand and sales in the key Spring selling season as well as mortgage rates, enabling demand, so it is still too early in the year to get a clear sign overall for the year. But, year-to-date (January-March), deliveries in 2024 were 11.3% lower than in 2023 and 39.5% lower than the 2022 peak, which was a somewhat artificial peak driven by the 'race for space' and low interest plus policy stimulus (Lower Chart). However, house building activity in 2024, especially house building starts activity, was affected by the persistent rain so Q2 may be boosted by a degree of catch-up work by house builders on larger sites although house builders on small sites are likely to just push back house building activity rather than catch-up due to a lack of spare capacity. Overall, whilst there has been a rise in brick deliveries and starts so far this year, large increases in brick deliveries and house building starts beyond seasonal activity are unlikely to be seen until mortgage rates fall significantly further and enable greater demand in 2024 H2 and, mainly, during 2025. #ukhousing #housing #ukhousingmarket #housingmarket #ukrealestate #realestate #ukconstruction #ukbuilders #construction #builders #constructionuk #buildersuk #building #ukbuilding #buildinguk #ukeconomy #constructionindustry #contractors #supplychain #constructionworkers #constructionworker #constructionwork #contractors #housebuilding #inflation #prices #buildingcontractors #growth #propertyprices #property #housing #housingmarket #housebuilding #housebuilders

➡️ UK House Price inflation forecast – Savills 📈 Savills projects a 23.4% increase in UK house prices over the next five years, equating to an £84,000 rise. By 2029, the average property value is expected to reach £442,000, up from today’s £358,000. For the coming year, Savills anticipates a 4% rise, or approximately £14,500, in typical house prices. Lucian Cook, Savills’ Head of Residential Research, commented that recent reductions in mortgage rates have bolstered buyer confidence, driving moderate price growth in recent months. “Mortgage rate trends have heavily influenced buyer behaviour over the past two years. Lower monthly mortgage costs are now filtering through to increased confidence among prospective buyers, supporting a steady growth trajectory,” he said. “As affordability improves, this should drive house price growth in the coming years, though short-term volatility remains a possibility. The market is still sensitive to debt cost fluctuations, and changes in property taxation could prompt temporary disruptions.” The forecast is based on the "mainstream" housing market, particularly second-hand properties, as new-build prices may follow a different trajectory. The research involved data from Oxford Economics and Nationwide Building Society. According to Emily Williams, Savills’ Director of Research, some homeowners are likely to delay moving until mortgage rates stabilise, likely in 2027, allowing them to build up equity. “This could lead to a significant increase in activity among second-and third-time buyers in the latter part of our forecast period as pent-up demand from the high-interest period is released,” she noted. The volume of first-time buyers, however, is anticipated to remain below pre-pandemic levels, partly due to the lack of government schemes to replace Help to Buy. Williams also observed that increased regulation in the rental sector, alongside a higher second-home surcharge, is likely to dampen demand from both cash and mortgaged buy-to-let investors. Williams added, “Lower levels of remote working have driven a resurgence in commuter demand around major employment centres, which has strengthened London’s performance over the past year. We expect some residual effects of the ‘race for space’ to unwind by 2025, likely moderating growth in the South West and East of England compared to the capital. However, beyond 2025, affordability will be the primary determinant across all regions. Despite easing mortgage rates, buyers in London and the South East will still require larger deposits and higher borrowing, which will constrain growth in these areas.” Savills has provided regional projections for house price growth over the next five years. North West, 29.4% North East, 28.2% Yorkshire and the Humber, 28.2% West Midlands, 26.4% Scotland, 25.8% Wales, 25.2% East Midlands, 24.6% South West, 21.6% East of England, 19.9% South East, 17.6% London, 17.1%

The average asking price for a UK home has dropped by more than £5,000 this month as the autumn budget caused housing market jitters before the usual Christmas slowdown. Average asking prices from new sellers fell by £5,366, or 1.4%, in November to £366,592, compared with the 0.8% decline usually recorded at this time of year, according to the website Rightmove. Despite the drop, Rightmove’s experts struck an optimistic note as the housing market is busier than a year ago, with sentiment improved by interest rate cuts. The Bank of England cut the base rate this month for the second time this year, by another quarter point to 4.75%. However, despite the base rate cuts, mortgage costs have edged up in recent weeks owing to other external factors. Swap rates, the rates at which banks lend to each other, rose after the budget last month and the US presidential election, amid uncertainty about inflation and the global economy. Interest rates are still expected to decline but not as far or as fast as previously thought, with analysts pencilling in a reduction to about 3.5% by early 2026 rather than to 3%.

Looking to buy a house in the next 12 months? The outlook for property prices has changed. According to a reputable forecaster, it is anticipated that house prices will experience a period of stagnation throughout the current year. Initially, Capital Economics had projected a 2% increase in property prices, but now believes that a more likely scenario is a growth of 0.5%, as reported by The Times. This prediction is based on a decrease in buyer demand due to the escalating cost of living and a volatile mortgage market. Andrew Wishart, senior UK economist at Capital Economics, explains that this decline in demand coincides with a significant and sustained increase in housing supply, the most notable since 2013, excluding the period following the lifting of lockdown restrictions. Wishart further suggests that the market may soon face an excess supply situation, which could potentially lead to a decline in prices. Recent data from Halifax reveals a 0.1% drop in UK house prices between April and May, slightly lower than analysts' expectations of a 0.2% decrease. Conversely, Nationwide, a rival lender, reported an increase in its measure of house prices for May, following two consecutive months of decline. Halifax also states that prices rose by 1.5% in the 12 months leading up to May, surpassing the median forecast of a 1.2% annual increase in a Reuters news agency poll. Amanda Bryden, head of mortgages at Halifax, attributes the resilience in market activity during the spring months to robust nominal wage growth and a degree of improved confidence in the economic outlook. Bryden adds that the stable property price landscape over the past three months is likely to instill greater confidence among both buyers and sellers.

Housing market on the rise. Respondents to the RICS Residential Market Survey expect the market to continue gaining momentum in the coming months. The most recent data shows a positive shift in the UK housing market, fuelled by recent falls in mortgage interest rates. Buyer demand and sales activity are both increasing, with industry professionals expecting more growth as we enter the fourth quarter of the year. In August, the number of people looking to buy a home increased by 15%, up from 4% in July. Meanwhile, house prices are rising again, entering positive territory for the first time since October 2022, with a net balance of +1 and experts predicting a steady increase over the next three months. On the supply side, there was a modest increase in the number of new property listings (+7, up from +3 in July), and the volume of appraisals suggests that this trend will continue, increasing the options for new buyers. Rising house prices and increased supply will benefit sellers. Higher prices increase their potential profit, raising the value of their property. An increased supply of homes tends to attract more buyers to the market, resulting in a competitive environment. However, if supply rises too quickly, it may reduce competition, resulting in longer selling times or lower prices. A balanced market with modestly rising prices and consistent demand is ideal for sellers because it ensures profitability while keeping buyers interested. Current market conditions should benefit sellers, and there is a growing sense of optimism, with +45% of respondents expecting sales activity to increase over the next year.

UK brick deliveries are a useful proxy for house building starts in the absence of monthly starts data. Brick deliveries in July 2024 were 19.0% higher than in June and 9.6% higher than a year ago (Upper Chart), according to the Department for Business and Trade. After 2 monthly falls, a rise in deliveries and starts in July 2024 was expected as housing market sentiment and demand picked up following slight falls in mortgage rates since Spring and with post-election certainty. It is worth noting that house building dropped off sharply in 2023 H2, so the annual percentage changes in 2024 H2 will look very positive, especially in the final quarter of this year. However, deliveries in July were still 11.0% lower than in January 2020 and 17.0% lower than the average between 2018 and 2019, which was before the recent distortions to the housing market and house building. Monthly deliveries and starts are volatile, particularly compared with house building completions, but they highlight that the housing nadir was in 2023 Q4 and 2024 Q1, and it has been recovering from a low base since then. However, year-to-date (January-July) deliveries in 2024 were still 6.4% lower than in 2023 and 32.4% lower than at the recent peak of housing optimism in 2022, before the sharp rise in mortgage rates and the consequent fall in housing market demand. Given the nadir of housing market demand and house building starts was in 2023 Q4 & 2024 Q1, the year-to-date percentage change in 2024 is likely to continue to gradually improve towards the end of 2024 and into 2025, assuming mortgage rates fall slightly further and housing market sentiment and demand rise. A greater concern long-term is where demand will come from for even 2021/22 house building levels (never mind 1.5 million homes in 5 years) if the reliance is solely on private house building, given mortgage rates will not fall back to the historic lows they were at as recently as 2021 and there currently isn't government support to enable private demand such as Help to Buy. So, house price affordability may remain a long-term issue as price falls in the downturn were limited by a strong labour market and very few forced sellers and further rates of price growth may be limited. However, the Chancellor’s Autumn Budget in October may see a change in direct public investment in house building (additional finance or finance brought forward for social and/or so-called ‘affordable’ housing) and government policy stimulus for private housing demand, especially for first-time buyers. #ukhousing #housing #ukhousingmarket #housingmarket #ukrealestate #realestate #ukconstruction #ukbuilders #construction #builders #constructionuk #buildersuk #building #ukbuilding #buildinguk #constructionindustry #contractors #supplychain #constructionworkers #constructionworker #constructionwork #contractors #housebuilding #buildingcontractors #growth #propertyprices #property #housing #housingmarket #housebuilding #housebuilders

The latest Halifax index, released on Friday, showed residential property prices up to £292,505, a 4.3% year-on-year increase, marking the strongest growth since late 2022. Nicky Stevenson, Managing Director at Fine & Country said: “House prices gained momentum in August, setting the stage for a potential Autumn boost. “Property transactions in September are typically 12% higher than in August, a trend that looks likely to continue this year. Recent moves by the Bank of England to cut the base rate and predictions for another potential cut later in the year should further fuel market activity. “Inflation also remains close to the government’s 2% target — although it is expected to rise slightly — helping to boost buyer confidence in 2024. With lower mortgage rates and easing financial pressures, more buyers are pulling the trigger on their moving plans. Meanwhile, more first-time buyers are stepping into the market after many were previously priced out by high repayment costs. “While house prices are steadily rising, an increase in housing supply — up 14% year-on-year in August — should help control price inflation. The number of homes listed for sale is at a seven-year high, helping balance out rising demand. Possible tax increases in October’s budget may temper this momentum slightly, and affordability challenges continue to impact some buyers. Despite this, there is cautious optimism that the current strength of the property market will help it navigate these challenges and hopefully remain on a steady growth path.” Read more: https://lnkd.in/e-TfCJ3Q #fineandcountry #houseprices #property #halifax

🏠The Berwyn Property team have seen many prices fall, yet in some areas of the UK Prices are rising. (👉See our website if your want to see our past Joint Venture success from BerwynServices.co.uk) What's your view on prices in your area❓❓ 👉🏠The UK housing market was “subdued” in March with prices edging down on the previous month as high mortgage rates continued to affect the market, according to Nationwide building society. It is the first time in three months that house prices have fallen, after gains of 0.7% in the previous two months. The average price of a home fell 0.2% from February to March, to £261,142, after a seasonal adjustment to the figures. https://lnkd.in/ey-NhFAx Rob Moore Mark Homer Progressive Property Saj Hussain Jamie York Andrew Roberts Property Week Richard Branson Theo Paphitis John Caudwell Gary Neville Brendan Quinn Aran Curry Oliver McNamara Ranjan Bhattacharya Simon Zutshi Elizabeth Warburton Mark Harvey Mark Fitzgerald Allan Harding David Coughlin

🏡 Zoopla UK House Price Index: January 2024 Insights 🏡 The UK housing market kicks off 2024 with positive momentum, rebounding from a challenging 2023. Here are the key highlights: 1. Annual House Price Inflation: 📈 UK house prices see a 0.8% annual inflation. 2. Buyer Demand Surge: 🏠💼 Year-on-year change in buyer demand spikes by 12%, signaling a robust start to the year. 3. Sales Agreed Below Asking Price: 💰📉 21% of sales are agreed at prices more than 10% below the asking price. Executive Summary: 📊 A positive start to 2024, fueled by sub-5% mortgage rates, but buyers remain price-sensitive and focused on value for money. Sales Market Activity: 📈🏠 Housing demand and sales agreed rebound in the first three weeks of 2024, supported by sub-5% mortgage rates. Sales agreed in the first 3 weeks of January surge by 13% compared to the same period a year ago. Sales activity increases across all countries and regions, with Yorkshire and the Humber leading at +19%. Pricing Trends: 📉📈 Annual price falls slow to -0.8% in December 2023, up from a low of -1.4% in October 2023. House prices continue to adjust with the largest falls in the East of England (-2.5%) and the South West (-2.2%). London's Housing Market: 🏙️🔄 London sees a uniform rebound in new buyer demand across all market segments. Housing prices in London have risen only 13% since 2016, while the rest of the UK sees a 34% increase. Affordability in London improves, but the market remains challenging, with a house price to earnings ratio of 13x. Caution for Buyers: ⚠️🛍️ The rebound is positive, but buyers are urged not to get carried away. It remains a buyers' market. Lower mortgage rates are expected to support sales volumes, but prices are likely to be kept in check. Outlook for 2024: 🔮📉 Adjusting to higher mortgage rates continues, with lower rates supporting more sales in 2024. House prices expected to be restrained by increased supply, buyers' price sensitivity, and a continued buyers' market. Conclusion: 🏡🔄 The UK housing market shows signs of recovery, with increased demand, sales activity, and supply. However, caution prevails as buyers are reminded of the importance of realistic pricing in a market still favoring them. Source: Zoopla UK House Price Index - January 2024