2022-09-27-莱坊-UK_Residential_Property_Market_Update_September_2022_2页_185kb

UK Residential Property Market Update Summary - September 2022

Core Content

The UK residential property market remained resilient in August 2022, despite the holiday season and ongoing economic challenges. Key factors influencing the market include rising mortgage rates, limited supply, and strong demand. The government's economic policies, particularly those related to energy bills and tax reforms, also play a significant role in shaping market sentiment and activity.

Main Points

• Market Resilience: The UK property market showed robust performance in August, with house price growth continuing at a high rate, albeit at a slower pace than previous months.
• House Price Growth:
  • Halifax reported an annual average house price growth of 11.5% in August, down from 11.8% in July.
  • Nationwide recorded 10% growth, down from 11% in July.
  • Despite these declines, growth remains well above pre-pandemic levels.
• Consumer Sentiment:
  • The IHS Markit House Price Sentiment Survey showed a score of +58 in August, slightly lower than +61 in July but still above the pre-pandemic average.
  • Most respondents believe their home will be worth more in a year, indicating continued optimism.
• Economic Outlook:
  • The UK economy contracted in Q2 2022 with GDP falling by 0.1%, but it returned to growth in July.
  • A potential second quarterly contraction in September, due to the royal funeral, could lead to a technical recession.
• Government Policies:
  • Prime Minister Liz Truss ruled out a windfall tax on energy companies and scrapped proposed corporation tax rises, signaling a pro-investment stance.
  • These policies are intended to attract foreign investment and boost the UK property market, particularly in London.
• Transaction Volumes:
  • UK property transactions in July were 104,000, down from record highs during the stamp duty holiday but still 3% above the five-year average.
• Lettings Market:
  • In London and the Home Counties, tenant demand outstrips supply, with a headline net balance of +50% in August (up from +43% in July).
  • Landlord instructions fell to -13%, reflecting a decline in supply and changes in the regulatory and tax environment.
• Country Market:
  • Transaction volumes in the country market are expected to remain strong for the rest of 2022.
  • Viewings were down 16% compared to the five-year average in August, but offers accepted were up 33%, indicating strong buyer interest.
  • Supply is gradually increasing, which may exert downward pressure on prices in the coming months.

Key Information

• Pent-up Demand: Despite the holiday season, there is still significant demand in the market, supported by limited supply.
• Mortgage Rates: Rising mortgage rates are contributing to slower house price growth, but the market continues to defy expectations.
• Market Outlook: The country market is expected to maintain strong transaction volumes, while the lettings market remains tight with high tenant demand.
• Policy Impact: The government's approach to energy bills and tax reforms may influence market dynamics, with potential risks of inflation and increased mortgage rates.

Quarterly Price Changes (Three Months to August 2022)

Q2 2022 Price Changes

Contact Information

• Chris Druce
  Senior Research Analyst
  Email: chris.druce@knightfrank.com
  Phone: +44 20 7861 5102

• Tom Bill
  Head of UK Residential Research
  Email: tom.bill@knightfrank.com
  Phone: +44 20 7861 1492

• Knight Frank Research Reports
  Available at: knightfrank.com/research

Important Notice: This report is for general information only and should not be relied upon. Knight Frank LLP cannot be held liable for any loss or damage arising from its use.