House prices increase amidst warning of ‘simmering’ market
This week saw the Office for National Statistics publish their house price index for May 2022, revealing that house prices grew by 12.8% over a twelve-month period – up from 11.9% in April 2022.
Reporting an average house price of £283,000 – a rise of £32,000 since this time last year – the ONS reveals Wales as the region experiencing the highest level of annual growth, at 14.4%.
This was followed by England (13.1%), Scotland (11.2%) and Northern Ireland (10.4%). London continues to be the region with lowest annual growth, at 8.2%.
Meanwhile, Rightmove reported their house price index for July 2022, revealing a 0.4% increase in the month, bringing the average property price to £369,968 – a record for the sixth consecutive month.
Reporting a 9.3% increase in the year, the property website revised their full-year 2022 forecast from 5% growth to 7%, despite reporting that the market was “cooling from boiling to simmer”.
Though a softening in demand is moving the market from a boil to a simmer, it remains 26% up on 2019. With such an imbalance remaining between supply and demand, prices look underpinned, and we would therefore only expect typical smaller seasonal month-on-month falls, rather than more significant price falls in the second half of the year.TIM BANNISTER, DIRECTOR OF PROPERTY SCIENCE, RIGHTMOVE
Truss plans to abolish housing target, as Government rolls out nutrient mitigation scheme
Tory leadership hopeful Liz Truss has stated that she would “abolish the topdown Whitehall-inspired Stalinist housing targets” if she were to become Prime Minister.
Speaking to a Sunday newspaper, Truss said she would amend the Levelling Up Bill and replace centralised targets with tax cuts and reduce red tape.
However, Rico Wojtulewicz, Head of Housing and Planning Policy at the National Federation of Builders, told Housing Today: “We’d build even fewer homes. Centralised targets exist for a reason. The minute we had housing targets the number of homes being built went up.”
Meanwhile, the Government has unveiled measures which it hopes will unblock an estimated 120,000 homes stalled because of nutrient neutrality rules.
The scheme will allow local planning authorities to grant planning permission for new developments in areas with nutrient pollution issues.
In addition, a new legal duty will be imposed upon water companies in England to upgrade treatment works by 2030 “to the highest technological levels”.
Homes England miss housing targets as material sales optimism falters
Homes England have reported that it directly supported the construction of 37,632 homes in 2021/22, missing its target of 44,275.
In their latest annual report, the Government housing agency revealed that they had also failed to meet three other key targets, citing “delays and access to labour supply and materials”.
This is against the backdrop of the latest state of trade survey from the Construction Products Association, which revealed an eighth straight quarter of sales growth for the second quarter of 2022, but that optimism is cooling.
Almost all manufacturers reported an annual rise in costs, citing demand as being the key constraint on activity in the months ahead.