Property Newsletter 23rd Dec 2024
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NEW NATIONAL PLANNING POLICY FRAMEWORK PUBLISHED.
The NPPF’s changes focus primarily on increasing the volume of housing delivery and boosting economic growth. The Standard Method for calculating housing need has also been modified and becomes the mandatory starting point for assessing local housing need. The new formula results in a national annual requirement of 370,000 new dwellings per year, meaning that most local authorities will be unable to demonstrate a five-year supply of housing and will need to update their local plans accordingly. One of the most notable changes is to Green Belt land – that is the buffer intended to prevent urban sprawl. The NPPF introduces a new designation of Grey Belt, which is Green Belt land that will be released for development where certain conditions are met. Do the changes go far enough? The Government has made it clear that the revised NPPF is just the first step in its broader plans to deliver more homes.
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Source: NRLA
LARGEST SALES PIPELINE FOR 4 YEARS
Committed sellers and buyers have continued to agree new deals ahead of stamp duty changes in April 2025, but the window to complete a sale by 31 March 2025 will now be unachievable for most buyers. Sales agreed in the last 4 weeks are 23% higher than last year. It’s been a stronger year for new sales, thanks to a higher volume of homes being listed for sale, boosting buyer choice. The average estate agent has agreed 6.1 sales per month over the first 11 months of 2024, the highest level since the pandemic boom in 2021. There is a sizable pipeline of deals that have been agreed and are working their way to completion in the first half of 2025. We estimate this pipeline to comprise of 283,000 homes worth ￡104bn. This is 27% higher than a year ago by number, and 30% more by value. It’s the biggest end-of-year sales pipeline by value since December 2020 (￡112bn).
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Source: ZOOPLA
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UK INTEREST RATES HAVE BEEN HELD AT 4.75% AFTER THE BANK OF ENGLAND VOTED TO KEEP BORROWING COSTS UNCHANGED.
In an unexpected split, three members of the nine-member rate-setting committee wanted to cut rates to 4.5% to boost growth. The Bank said it thought the economy had performed worse than expected, with no growth at all between October and December. Rates are still expected to fall gradually next year, with the first cut possibly coming in February.
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Source: BBC
?BUYERS BECAME MORE PRICE-SENSITIVE IN Q4 2024
A leading indicator for house price inflation is the size of the gap between the asking price and the agreed sale price. The smaller the gap, the faster prices rise, while the larger the gap the slower prices rise. Buyers have become more price-sensitive in recent weeks in the wake of the Autumn Budget and amid growing uncertainty over the outlook for mortgage rates, which have drifted higher. Buyers are currently paying 3.6% below the asking price, compared to 3.2% over the summer, however it remains a buyer’s market. We expect a greater choice of homes for sale and price-sensitive buyers to continue to keep UK price inflation in check over 2025.
Source: Zoopla