2022-04-21-莱坊-UK_Residential_Property_Market_Update_March_2022_2页_364kb

UK Residential Property Market Update Summary (April 2022)

Core Content Overview

The UK residential property market experienced significant growth in early 2022, with house price increases reaching their highest level since 2004. The market is showing signs of slowing down, with forecasts indicating a return to more moderate growth rates for 2022. The report highlights regional differences, the impact of supply and demand dynamics, and the resilience of certain sectors like prime London sales and lettings.

Key Market Trends

House Price Growth

• Annual Growth: Reached a record high of 14.3% in March 2022, according to Nationwide.
• Detached Properties: The average price of detached homes increased by £68,000 since the pandemic began, compared to £24,000 for flats.
• Price Gap: The average price gap between flats and terraced houses doubled from £12,000 to £25,000 since the pandemic.
• Quarterly Growth: Wales was the strongest performing region with a 15.3% year-on-year increase, while London saw a 7.4% increase, the weakest performance.

Mortgage Approvals

• Decline: Mortgage approvals for home purchases declined in February by 15.3%.
• Historical Context: Approvals were 32% below the pandemic-fuelled peak in November 2020, but still higher than the monthly average in 2019.

Market Sentiment

• New Instructions: The latest RICS sentiment survey indicated that new instructions turned positive in March for the first time in 12 months.
• Supply and Demand: A net balance of +8 respondents reported an increase in new listings, and +9 in new buyer enquires, showing a closer alignment between supply and demand since the pandemic.

Price Expectations

• Current Expectations: The IHS Markit Household Price Sentiment Index reached +61 in March, up from +59 in February.
• Future Expectations: Future price expectations increased slightly to +66.4 from +66 in February.
• Positive Sentiment: A score above 50 indicates positive sentiment, and the market remains optimistic.

Prime London Market

Sales

• Prime Central London (PCL): Average prices grew by 2.1% year-on-year, the strongest growth since May 2015.
• Prime Outer London (POL): Average prices increased by 2.1% in the three months to March.

Lettings

• Prime Central London: Average rental values increased by 3.5% in the first three months of 2022.
• Prime Outer London: Average rental values rose by 2.5%.
• Annual Growth: Rental values in prime central and outer London increased by 26.3% and 21%, respectively, in the year to March, due to a sharp decline in rental values in early 2021.

Country Market

• Low Supply Challenge: The country market continues to face low supply, leading to strong price inflation.
• New Instructions: New instructions outside London were -2% below the five-year average in March, the smallest gap since April 2021.
• High Demand: Despite the gap, the number of new instructions was the highest in a calendar month since June 2021, indicating strong buyer interest.

Summary of Growth Rates

Outlook

• Endgame for Double-Digit Growth: With rising living costs and borrowing rates, the market may be entering a phase of more moderate growth.
• Forecast: Knight Frank predicts mainstream market growth of 5% in 2022.
• Consumer Confidence: While consumer confidence has slid to levels last seen in late 2020, it has not yet affected homeowners' expectations.

Contact Information

• Chris Druce: Senior Research Analyst, PRICECHANGE
  • 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

Disclaimer

Knight Frank Research provides strategic advice and forecasts to a wide range of clients. This report is for general information only and not to be relied upon in any way. No responsibility or liability is accepted for any loss or damage resulting from its use. Reproduction is not allowed without prior written approval.