In the year to end November 2017 new build house prices rose on average by 4.8% across the UK which is down on last year’s figure of 6.1%. If Greater London is taken out of the calculation and we take a crude average of the remaining regions, then the change is less pronounced with average house price growth of 4.2% compared to a figure of 4.4% last year. Looking across the regions it can be seen that the roll out of the housing market recovery has continued and some sustained price rises are now evident in all regions. But whilst all regions are now seeing some evidence of house price growth, the recent hot spots of Greater London, the South East and East Anglia are now seeing a slowing rate of growth. In line with other commentaries, Greater London is no longer the leading region. Indeed the relatively high new build price change figure may be at odds with other indices due to the effect of Help to Buy and the distribution of new build activity in this region. The South East, South West, East Midlands and East Anglia and Greater London still show the strongest growth rates and these regions neatly define the South of the country. But all regions are now in positive territory and the potential for growth, when viewed through the window of average property prices relative to earnings, lies in the North of the country. First Time Buyers The First Time Buyers index calculates an estimated value for a 70 sq m 2 bed property in each region of the UK. It adjusts by region according to the number of flats or terraced houses that are being built and valued in those regions. The index has been recalibrated and is now calculated against the Office for National Statistics EARN05: Average weekly gross earnings of full time employees, by region. People. The table shows that whilst earnings are significantly higher in Greater London, this does little to compensate for the very significant difference in average residential property prices. In fact a clear North South divide is evident with: Greater London, South East, South West and East Anglia having a HPE multiple at 5 or above and the remaining regions being below this number. Powered by LSL New Build Index The market indicator for New Builds December 2017 Note: This month’s figures are based on projected data, generated whilst work is being undertaken on the data collection system.
Transcript
In the year to end November 2017 new build house prices rose on average by 4.8% across the UK which is down on last year’s figure of 6.1%.
If Greater London is taken out of the calculation and we take a
crude average of the remaining regions, then the change is less
pronounced with average house price growth of 4.2% compared to
a figure of 4.4% last year.
Looking across the regions it can be seen that the roll out of the
housing market recovery has continued and some sustained price
rises are now evident in all regions. But whilst all regions are now
seeing some evidence of house price growth, the recent hot spots
of Greater London, the South East and East Anglia are now seeing
a slowing rate of growth.
In line with other commentaries, Greater London is no longer the
leading region. Indeed the relatively high new build price change
figure may be at odds with other indices due to the effect of Help to
Buy and the distribution of new build activity in this region.
The South East, South West, East Midlands and East Anglia and
Greater London still show the strongest growth rates and these
regions neatly define the South of the country. But all regions are
now in positive territory and the potential for growth, when viewed
through the window of average property prices relative to earnings,
lies in the North of the country.
First Time Buyers
The First Time Buyers index calculates an estimated value for
a 70 sq m 2 bed property in each region of the UK. It adjusts
by region according to the number of flats or terraced houses
that are being built and valued in those regions. The index has
been recalibrated and is now calculated against the Office for
National Statistics EARN05: Average weekly gross earnings of full
time employees, by region. People. The table shows that whilst
earnings are significantly higher in Greater London, this does
little to compensate for the very significant difference in average
residential property prices.
In fact a clear North South divide is evident with: Greater London,
South East, South West and East Anglia having a HPE multiple at
5 or above and the remaining regions being below this number.
Powered by
LSL New Build IndexThe market indicator for New Builds December 2017
Note: This month’s figures are based on projected data, generated whilst work is being undertaken on the data collection system.
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The most affordable regions for first
time buyers are the North East and
Yorkshire and the Humber which both
have multiples below 4. The one to watch
must be the East Midlands which shows
good levels of affordability combined with
relatively high house price growth.
The Future
Business Insider talks of the recent RICS
survey that highlights the growing skills
shortage that is affecting the housing
sector. A growing number of surveyors
believe that the skills shortage is
influencing the ability of the sector to
grow its output. A difficult issue given the
Government’s ambitious house building
targets.
The problem has a few faces, with an
ageing workforce of home grown skilled
labour, combined with Brexit uncertainty, and a weak pound
making the UK a less attractive place for overseas construction
workers to come to.
The Farmer Review of the UK construction labour model,
commissioned by the Construction Leadership Council, at the
request of the Government, in 2016 suggests that the sector could
benefit from modernisation. The approach to the labour force
within the house building sector is somewhat established and
it is possible that skills shortage issues may worsen before they
improve.
UK inflation stands at 3.1% which is a
near six year high and it has just been
reported by the Thomson Reuters /
Ipsos Primary Consumer Sentiment
Index that British consumer confidence
slid back in December to its second
weakest level in nearly four years.
But with all the uncertainty around the
economy and sector we can be sure
that people will need to keep moving
home. And in the HBF 2017 customer
satisfaction survey there are two
standout results that are worthy of
mention. When asked ‘If you were to
buy another property, would you buy a
newly-built or newly-converted home
again?’ 91% of respondents said ‘yes’.
That seems like an extremely good
figure and it is a great shame that no
comparable data seems to be available
from second hand home buyers. But it means that the majority of
new home buyers (perhaps representing one in eight of all sales)
will come back for more. And when asked in the same survey ‘If
you were to buy another property, would you buy a newly-built or
newly-converted home again from the same builder?’ 80% said
yes, which means that a clear majority of house builders have
happy customers.
In the face of difficult conditions the sector continues to perform
well, making plenty of money for its shareholders, and keeping the
great majority of its customers happy. If only the wider economy
was performing as well!!
This is based on a weighted calculation which reflects regional differences in sales volumes of flats and terraced property. Ave annual earnings from ONS EARN 05: Average Gross Earnings of Full Time Employees.
2 BED 70 SQ.M
STARTER HOMEAVE ANNUAL EARNINGS FULL TIME EMPLOYEES HPE AFFORDABILITY
INDEX
East Anglia £213,269 £32,610 6.54 114
East Midlands £134,350 £28,585 4.70 82
Greater London £471,622 £38,188 12.35 215
North East £104,884 £27,032 3.88 68
North West £123,670 £27,240 4.54 79
Scotland £147,552 £30,486 4.84 84
South East £235,724 £33,966 6.94 121
South West £164,068 £28,484 5.76 100
Wales £124,217 £26,771 4.64 81
West Midlands £136,469 £27,794 4.91 86
Yorkshire and the Humber £110,984 £27,608 4.02 70
Average 5.74 100
First Time Buyers - Affordability.
REGIONS YR TO NOV 16 YR TO NOV 17
East Anglia 5.6% 5.4%
East Midlands 7.3% 6.4%
Greater London 9.5% 6.0%
North East -0.2% 1.5%
North West 4.6% 4.0%
Scotland 3.7% 3.2%
South East 8.2% 6.0%
South West 6.1% 6.0%
Wales 4.3% 3.2%
West Midlands 2.3% 3.5%
Yorkshire and the Humber 2.1% 2.6%
Average excluding GL 4.4% 4.2%
Weighted Average Price Change
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Average New Home PricesPeriod December 2016 to November 2017 and % variation over same period 2015/16.
SCOTLAND £ AVERAGE %+/-
£261,851 -2.3% ↓
£141,708 5.4% ↑
£190,057 10.8% ↑
£199,807 7.5% ↑
NORTH EAST £ AVERAGE %+/-
£256,584 -1.5% ↓
£104,333 1.6% ↑
£158,925 3.3% ↑
£144,020 3.7% ↑
NORTH WEST £ AVERAGE %+/-
£309,17 5.0% ↑
£131,954 3.3% ↑
£176,162 4.1% ↑
£170,855 7.6% ↑
YORKSHIRE & THE HUMBER £ AVERAGE %+/-
£282,670 3.1% ↑
£123,521 5.5% ↑
£156,576 1.2% ↑
£151,662 2.4% ↑
WEST MIDLANDS £ AVERAGE %+/-
£321,360 -0.2% ↓
£143,561 3.4% ↑
£203,501 5.2% ↑
£186,173 2.1% ↑
EAST ANGLIA £ AVERAGE %+/-
£408,217 1.5% ↑
£217,447 7.4% ↑
£269,878 6.4% ↑
£263,353 8.1% ↑
WALES £ AVERAGE %+/-
£251,017 4.7% ↑
£135,045 -4.9% ↓
£172,282 7.8% ↑
£176,429 6.2% ↑
EAST MIDLANDS £ AVERAGE %+/-
£297,292 4.5% ↑
£120,063 10.0% ↑
£184,532 8.1% ↑
£179,823 10.8% ↑
SOUTH WEST £ AVERAGE %+/-
£366,225 4.4% ↑
£181,559 5.5% ↑
£232,491 2.7% ↑
£226,666 5.9% ↑
GREATER LONDON £ AVERAGE %+/-
£763,817 19.0% ↑
£435,446 9.4% ↑
£461,549 -6.8% ↓
£483,354 2.7% ↑
SOUTH EAST £ AVERAGE %+/-
£492,337 3.5% ↑
£225,922 9.6% ↑
£326,052 5.4% ↑
£309,806 9.9% ↑
Detached
Flats
Semis
Terrace
LARGEST % INCREASEGREATER LONDON
19.0%GREATER LONDONLARGEST % DECREASE
-6.8%
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This Index has been prepared by e.surv using anonymised data
based on a proportion of all new build valuations provided for lending
purposes. Figures represent 12 month rolling averages for each
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valuation practice, acting for lenders, developers, Social Housing
organisations and other stakeholders in the residential property
market.
The business employs circa 450 chartered surveyors and covers the
entire UK.
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exchange, assisted schemes and new build stock, land sales and
acquisitions.
Report sources:
See Government press release on white paper.
DCLG released 7th Feb 2017
Housing White paper rented sector and house building
Headed: Government announces ambitious plan to build the homes Britain needs
Disclaimer: The data is provided by LSL Land & New Homes and is based on data provided as described above. While reasonable skill and care has been taken in the preparation of the data – the copyright and all other intellectual property rights of which belong to e.surv limited - neither e.surv Limited nor LSL Land & New Homes can accept liability for the accuracy or completeness of the data provided.
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