House price growth continues, with materials facing an uncertain 2022

Nationwide and Zoopla report annual house price growth

This week saw both Nationwide and Zoopla release their latest house price index, with both reporting further growth over the past 12 months.

Nationwide recorded a 0.9% increase in house prices in November, with the average property valued at £252,687. This represents a 10% increase in the year.

Nationwide also reported a 30% reduction in housing transactions in October, blaming the expiry of the stamp duty holiday at the end of December. This drop was also reflected in the Bank of England’s mortgage approval rates, with the number of approvals for house purchase falling 6.5% to 67,199 in October; just 1% higher than the 2014-2019 average.

Meanwhile, Zoopla reported an easing in house price growth, with the average property valued at 6.9% higher than last year. The property website also reported an 8.3% increase in the value of houses, whilst apartment values rose at just 1.6%.

Material supplies face uncertainty in 2022, as stockpiling drives price growth

Whilst supply chain shortages continue to ease, the Construction Leadership Council has warned that bricks and timber could both face further challenges going into the New Year.

In their latest products availability statement, the CLC warned that supply continues to struggle to keep up with demand, with delays at ports slowing production of timber in Scandinavia. Lead times for bricks will also remain an issue going into 2022, with developers and manufacturers advised to work more closely to ensure timely supply.

Larger developers are stockpiling materials to avoid delays on site; but, according to Rider Levett Bucknall, this is causing supply issues for smaller firms and drives up tender prices.

RLB added that contractors are not willing to freeze tender prices for long periods, and are more selective about the projects they choose to bid on.

Report recommends major planning changes, as Countryside reveals strong recovery

The Government’s ‘levelling up’ agenda, along with their housebuilding targets, cannot be met – unless there are fundamental changes to the planning system, a report from the Home Builders Federation and the Land Promoters and Developers Federation has concluded.

Published by planning consultancy Lichfields, and commissioned by the HBF/LPDF, Feeding the pipeline concludes that the UK needs to increase delivery by 59,200 homes per year to reach the Government’s target of 300,000 new homes a year by the mid-2020s.

The key reason for the shortage, the report finds, is the declining pipeline of planning consents for building plots, and recommends that this must “increase rapidly”.

Finally, partnerships developer Countryside saw strong recovery from 2020, with a 33% rise in completions during 2021 and a return to profit.

Announcing preliminary results for the year to end of September 2021, Countryside reported a pre-tax profit of £85.4m, after a loss of £1.9m in 2020.

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