Property Market Monitor: February 2020

The UK house price growth has continued its upwards trend in recent months. In January 2020, it edged up to 1.9% year-on-year, the largest increase in fourteen months and up from 1.4% in December. This follows twelve successive months in which annual price growth had been below 1%. As our chart of the month shows, it is also a continuation of the upwards trend since a trough of 0.2% was reached in September 2019. Prices are up by 0.8% in the last three months compared to the previous three months and Q4 2019 was the strongest quarter since Q2 2018.

Chart of the month: The UK house price growth has continued its upwards trend in recent months

Picture 1

Source: Nationwide House Price Index

Market Commentary

  • Housebuilding activity in the UK remains below government targets. According to recent data from the Ministry of Housing, Communities and Local Government, work started on only 39,510 new homes between July and September 2019, down 11% from a year earlier. Over the 12 months to the end of September 2019, work began on 157,550 new homes, down 7% from a year earlier [1].
  • The latest English Housing Survey compiled by the Ministry of Housing, Communities & Local Government (MHCLG) showed a slight uptick in the home ownership rate in 2019 to 63.8% (from 63.5% in 2018). Yet as showed in Figure 2, house price to earnings ratio remains very high, especially for first time buyers.
  • The underlying pace of the housing market activity has remained broadly stable over the past few months, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.

Figure 1: House price performance for first time buyers across the UK regions

Picture 2

Source: Nationwide House Price Index

Figure 2: First time buyer house price to earnings ratios

Picture 3

Source: Nationwide House Price Index

As you’ll have seen, we had a good start to 2020 and have so far this year funded £1,250,000. We continue to see a healthy deal flow coming from across the UK and have some exciting loans in Stoke-on-Trent and Bournemouth that are currently undergoing due diligence by our team. We continue to like Houses of Multiple Occupancy (HMOs) deals and are keen to fund more in the right locations. We also see good appetite from our lenders who are keen to deploy cash on good deals. Our recent loans were snatched up by hungry investors in minutes – two of our three recent loans were funded in less than 1 minute.

Keep an eye on our upcoming loans, and make sure you’ve got yourself on AutoLend with .


[1] Source: Homebuilding & Renovating

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