Lloyds reports August dip
The latest house price index from Lloyds has revealed that house prices fell slightly in August by -0.2%, following a -0.1% decrease in July.
This means that the average property price is now £298,468, compared with £299,153 in July.
Annual house price growth also fell by -0.4%, the first year-on-year decrease since November 2023.
Northern Ireland continued to record the strongest annual growth, with prices up 6.9% year-on-year, whilst prices in Scotland rose 3.5% and Wales saw a rise of 0.6%.
Property value growth remains strongest in the north of England, with the North East recording an increase of 2.7%, and 2.0% in the North West.
By contrast, the South East saw prices down -1.6% year-on-year, followed by Greater London, where prices fell -1.5%.
Housing slump drives wider construction decline
The latest Purchasing Managers’ Index from S&P Global as seen construction output slump from an index of 44.3 in August from 44.7 in July.
Buyers reported a decline in construction output for the twelfth successive month, with housing driving the downturn, registering an index of 37.6.
Tim Moore, Economics Director at S&P Global Market Intelligence, said: “A sharp and accelerated drop in residential activity more than offset slower falls in the commercial and civil engineering sub-sectors.
“Sluggish demand conditions and low client confidence, combined with anxiety about the impact of the Middle East conflict, were again factors contributing to lower workloads across the construction sector.”
Meanwhile, official figures from the Office for National Statistics revealed that private house building fell by -4.9% in July.
However, total construction output rose by 0.1% in the month, following a decrease of -0.1% in June and -0.8% in May.
New buyer enquiries improving
The latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors has found that new buyer enquiries have turned less negative, but remain relatively weak against a “challenging backdrop”.
The headline net balance for house prices was -28% in the month, a slight improvement from the -29% recorded in the previous survey.
Over the next twelve months, respondents envisage a broadly stable outlook for house prices.
New buyers could face decade-long wait for road adoption
New research by the Home Builders Federation (HBF) has found that communities are waiting up to twelve years for road adoptions on their new developments.
The Slow Lane to Adoption report also revealed that Section 38 agreements are taking just over four years on average from submission to adoption, and Section 278 agreements can take up to a year to be approved.
Many developers will therefore turn to private management companies, with the HBF stating: “Where roads and other estate amenities remain unadopted, home builders are left with no option but to bring in private management companies to take on responsibility for maintaining roads, open spaces, drainage, lighting and other shared infrastructure.
“Residents can therefore face additional estate management charges on top of council tax, which should, in theory, cover such costs.”
Developer and supply chain updates
Berkeley Group is urging the Government to urgently reform stamp duty, proposing a 1% cap for first-time buyers and downsizers and removal of the 5% investor surcharge to stimulate housing transactions.
It argues that the current regime has become a “binding constraint” on the market, with weak transactions contributing to stalled development and potentially costing the Treasury more in lost tax revenue than the regime generates from new-build sales.
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Vistry is proposing a new “Choice-led Shared Ownership” model that it says could enable 30,000 additional new-build sales a year and support 150,000 homes over five years by allowing first-time buyers to choose any qualifying property.
The model would combine buyer equity, developer discounts and institutional/National Housing Bank finance, with Vistry claiming it could attract £13.5bn of private capital and reduce the need for government grant funding by up to £10.5bn.