Residential Property Review – November 2022


More Stamp Duty changes in Autumn Statement

Chancellor Jeremy Hunt’s Autumn Statement on 17 November left housing out of the limelight, though it did include a commitment to keep the Stamp Duty Land Tax (SDLT) changes announced in the mini budget – for now.

In September, then-Chancellor Kwasi Kwarteng increased the nil-rate threshold of SDLT to £250,000 (previously £125,000) for residential property in England and Northern Ireland. First-time buyers (FTBs), it was announced, could spend £425,000 (previously £300,000) without paying a penny in tax.

Moreover, FTBs also benefited from an increased maximum purchase price of £625,000 for which First Time Buyers’ Relief could be claimed, up from £500,000.

In his Autumn Statement, Mr Hunt confirmed that he will uphold these changes – but only until March 2025. Originally, the changes had been implemented on a permanent basis.

Elsewhere in the Autumn Statement, rent increases in the social housing sector will be capped at 7% in the next financial year. In total, Mr Hunt announced around £55bn in spending cuts and tax rises.

Hesitant FTBs put the brakes on

Higher mortgage costs have caused many prospective buyers to put the brakes on their house purchase, with those buying their first home the worst impacted.

Buyer demand fell by 20% in October compared to a year earlier, according to Rightmove, with soaring borrowing costs and rising economic uncertainty the key drivers. FTBs were the most hesitant, with demand down 26% in the month.

FTBs have lost another motivation to buy since the end of the Help to Buy Equity Loan scheme. The scheme, which was set up to help FTBs purchase a home in England, has now closed to new applications; all homes purchased via the scheme will need to have completed by the end of March 2023.

Help remains for FTBs, however, including the Lifetime ISA, which adds a government bonus of 25% onto savings up to £4,000 each year. The Help to Buy ISA, meanwhile, has closed for new applicants, though anyone with an existing account can still add up to £200 per month until November 2029.

A quarter of landlords plan to sell

More than one in four landlords is thinking about selling properties, according to a new survey that reveals the extent of discontent in the sector.

In recent years, landlords have had to deal with a variety of regulatory and tax changes, as well as stricter Energy Performance Certificate (EPC) requirements. In response, 39% of buy-to-let investors now plan to put rents up.

Donna Hopton, Director at cherry, which carried out the research, noted that, during recent market turbulence, buy-to-let investors have “arguably been hit hardest”. Despite this, she said, “there are also millions of landlords who remain committed to the market, and it’s a market of continued demand from tenants and rising rents, so there will be plenty of opportunity for property investors.”

House prices headline statistics

House Price Index (September 2022)*
Average House Price £294,559
Monthly Change 0.00%
Annual Change 9.50%

*(Jan 2015 = 100)

    • Average house prices in the UK increased by 9.5% in the year to September 2022
    • On a non-seasonally adjusted basis, average house prices in the UK remained unchanged between August and September, with a 0.0% change in price
    • House price growth was strongest in South West England where prices increased by 11.9% in the year to September 2022.

House prices – Prices change by region

Region Monthly change (%) Annual change (%) Average price (£)
England 0 9.6 £314,278
Northern Ireland (Quarter 3 – 2022) 4.1 10.7 £176,131
Scotland -0.9 7.3 £191,141
Wales 2 12.9 £223,798
East Midlands 0 11.3 £252,982
East of England 0.1 10.4 £362,197
London -0.6 6.9 £544,113
North East 0.3 5.8 £163,768
North West 0.6 9.1 £219,005
South East -0.2 10.3 £403,515
South West 0.3 11.9 £336,583
West Midlands Region -0.3 10.1 £253,864
Yorkshire and The Humber 0 8.5 £212,593

Source: The Land Registry.
Release date: 16/11/22. Next data release: 14/12/22

Average monthly price by property type
September 2022

Property Type Annual Increase
Detached £463,150 11.40%
Semi-detached £286,654 11.00%
Terraced £241,880 9.20%
Flat / maisonette £232,987 4.80%

Source: The Land Registry. Release date: 16/11/22

Housing market outlook

“While a post-pandemic slowdown was expected, there’s no doubt the housing market received a significant shock as a result of the mini budget which saw a sudden acceleration in mortgage rate increases. While it is likely that those rates have peaked for now – following the reversal of previously announced fiscal measures – it appears that recent events have encouraged those with existing mortgages to look at their options, and some would-be homebuyers to take a pause.”

Kim Kinnaird, Director at Halifax Mortgages
Source: Halifax, November 2022

Contains HM Land Registry data © Crown copyright and database right 2022.  This data is licensed under the Open Government Licence v3.0.

Written and supplied by The Outsourced Marketing Department. All details are correct at the time of writing (24 November 2022)