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Connells Group
Market Report
connellsgroup.co.uk
Quarter 2, 2016
Contents
Introduction3
Estate Agency
4-7
Land & New Homes
8-9
Residential Lettings
10 - 13
Mortgages
14 - 17
Asset Management
18 - 19
Survey & Valuation
20 - 22
Economic Outlook
23 - 24
Methodology 25
About Us
26 - 27
Contacts28
3
Introduction
David Livesey,
Group Chief Executive
I am pleased to present to you our usual report on the
residential housing market in respect of Q2. However, I will
spend most of this overview looking at the market immediately
pre and post the EU referendum vote on 23rd June, when the
country made a momentous long term decision that quite
naturally has some short term consequences.
to 2014 and, in the three weeks since, they have increased and are
now broadly running level with 2014.
In the week following the Brexit decision, aborted sales (buyers
withdrawing from agreed sales pre contract) spiked at 71 per
day, compared to 50 per day seen during May. Some of this was
opportunistic ‘chipping’ of deals, some was prompted by genuine
concern, notably from foreign buyers living and working in the
South East and being paid in sterling. However, in the weeks since,
abortive sales have returned to normal levels, averaging 50 per day
in the last 2 weeks.
We entered Q2 with a buoyant performance in all areas (sales,
lettings, surveying, mortgages, conveyancing, new build) and this
continued into April and May until a notable hesitation appeared
late May / early June. Overall, a good second quarter but this was
overshadowed by the lead up to the 23rd June vote.
Here are some more indicators from the last two weeks compared
to the equivalent period in 2015:
Unlike the General Election of last May, which removed uncertainty
and provided a positive boost to the summer property market, the
Brexit vote delivered a dose of pre-vote jitters, some immediate
negative impacts, and an overall increase in short term uncertainty.
My instinct is that this uncertainty will dissipate, with domestic
politics being resolved, and the Government, Bank of England and
other institutions focused on an orderly withdrawal from the EU.
- Market appraisal activity is up 3%
- New instructions are level however, in the last week these are up
by just over 2%
- Prices have been reduced on 8% of our available stock – only
slightly up from early June where the figure was 6.5%. These price
reductions average 5% of the asking price.
Brexit - what is really happening?
- The number of offers made are down 6%
- Sales agreed are down 9%, however, this figure has improved to
7.4% in the last week
2015
2016
12.8
11.6
In the three weeks prior to 23rd June, sales agreed were 11% down
on the same weeks of 2015, when the market was strong, but 1%
up on 2014 when it was starting to weaken after a very strong spring.
10.4
In the three weeks after, sales are off by 13% and are now 5%
below 2014. This is a greater than expected downturn and reflects
some hesitancy from buyers.
5.6
9.2
8
6.8
4.4
3.2
Average Sales per Branch
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
2
Feb
Whilst web enquiries reduced significantly in June, down 26% on
2015, they remained broadly in line with the levels seen in 2014. In
the three weeks prior to 23rd June, they were down 5% compared
2014
14
Jan
Our staff interact with all elements of the housing market on a
daily basis: supporting customers that are looking to buy, sell,
rent or let properties, as well as servicing the needs of the major
Housebuilders and Lenders. These interactions provide us with a
rich and detailed view of market sentiment, activity and direction,
well in advance of the usual monthly market statistics, and I want
to draw upon our insights and share some of our current data for
the period to 20th July.
In general terms, London and the South East seemed to have
suffered the worst impact, but even after three weeks, recovery
is visible.
So overall, whilst sales agreed have taken a step down from the very
high levels in Q1, and are down 13% compared to the same period
last year, all other indicators are looking healthy and improving each
week and this infers a relatively short period of lower transaction
volumes. Indeed, our branches are already seeing activity returning
to expected July levels.
In Q2 we saw house prices at Exchange increase by 2.4% just
ahead of our 2% prediction at the end of Q1. Our view is that
with the continuing imbalance of high demand and low stock
for sale, house prices will stay level in Q3, picking up again
thereafter.
With the combination of potential reductions in interest and
corporation tax rates, reassuring messages from the Government
and the Bank of England, with no signs of reduced appetite from
Lenders and ‘business as usual’ comments from Housebuilders, the
housing market is weathering the uncertainty of Brexit well. For
instance, Rightmove, a good barometer of customer appetite, has
reported new listing levels similar to previous years, with asking
prices and enquiry levels in line with a typical run-up to the summer
holiday season.
‘So far, so good’, the medium term step-down in transaction
volumes is a healthy re-adjustment rather than a worrying cliffhanger, and it is in tougher market conditions like this that the
Connells Group really excels. Being the best seller of homes is not
easy and the cut-price / weaker agents may well report figures that
are not reflective of the underlying strength of the market. When
an estate agent tells you he will sell your house for less, he is really
telling you he will sell your house for less!
The housing market remains active, and rather than take our foot
off the pedal waiting for long term decisions to be made, we will
be focused on working hard for our customers and clients, and
building on our strong year-to-date position. To use an EU (well,
French!) quote, ‘Plus ça change, plus c’est la même chose’, the
more things change, the more they stay the same!
On the back of a strong performance in the first
quarter, and with the EU referendum scheduled for
June, many industry experts suggested that the second
quarter of the year would see a significant dip in
activity levels. However, with much of the uncertainty
not materialising until the weeks immediately before
the vote, we have in fact seen activity levels for the
quarter above those of 2015, on nearly all measures.
With the outcome of the referendum introducing both
political and economic uncertainties, it is unlikely that
we will see this level of activity maintained during
the coming quarter. Whilst some transactions and
prices within London and the South East have felt an
immediate impact from the Brexit decision, the extent
to which this goes beyond a knee-jerk reaction and the
usual seasonal summer slowdown remains to be seen
and with continued demand, the market may fare
better than some are suggesting particularly as we see
some easing of house price inflation.
David Plumtree,
Group Chief Executive
(Estate Agency)
The first six
months of
2016
27
have seen an
increase in
the number of
applicants
registering
their interest
in the market
with numbers
%
ahead of
the same
period in 2015
5
Estate Agency
David Plumtree,
Group Chief Executive (Estate Agency)
New buyers and instructions
Viewings
MM The number of new instructions to the market slowed during
the course of Q2, ending 2% below Q1 2016. Despite this
reduction, the Q2 performance represented an uplift of 3% on
the level achieved in Q2 2015.
MM The level of viewing activity dipped by 4% compared to the
levels seen in Q1, but remained 4% ahead of Q2 2015. With
both April and May matching the Q1 average, the reduction in
activity was driven by the reductions experienced in June which
was 6% down on June 2015.
MM The first six months of 2016 have seen an increase in the
number of applicants registering their interest in the market
with numbers 27% ahead of the same period in 2015.
There was a pronounced drop in registrations in June as we
approached the EU referendum, however, June in isolation was
still 9% ahead of the same period in 2015.
MM The ratio of applicants registered to new instructions was 8.2
in the quarter. Whilst this is down from 9.3 in Q1 2016, it
compares favourably to Q2 2015 (6.9) and Q2 2014 (6.5) and
continues to reflect the high level of buyer demand for new
properties coming to the market.
MM Following the buoyant start to the year, the sales market started
confidently in Q2 with both buyer and seller activity levels
remaining strong during April and May before the approaching
referendum introduced some signs of hesitancy. Applicant
registrations, market appraisals and instructions all performed
ahead of Q2 2015 although the uncertainty introduced by the
referendum outcome will no doubt have a bearing on this trend
continuing into Q3.
MM With the level of new instructions continuing to be outpaced by
the level of new applicant registrations, the outlook for buyers
is likely to remain competitive during the coming months whilst
the emerging political and economic uncertainties start to
develop.
MM Despite the fall experienced during June, viewings in the first six
months of the year are 6% ahead of the same period in 2015.
Offers
MM The number of offers in the quarter increased by 4% compared
to Q2 2015.
Sales agreed
MM With buy-to-let investors bringing forward many of their
planned purchases to Q1, and some buyers holding back until
after the referendum, the number of sales agreed in the quarter
fell by 2% compared to Q2 2015.
MM Year to date, our sales activity remains 2% ahead of the first six
months of 2015.
20
6080
0
4060
2040
020
0
180
140
180
120
160
180
100
140
160
12080
140
160
Number of buyer offers
Number of buyer offers
Jun-16
Jun-16
Jun-16
May-16
May-16
May-16
Number of buyer viewings
Number of buyer viewings
60
100
120
40
80
100
8.5
9.0
8.0
8.5
9.0
7.5
8.0
8.5
7.0
7.5
8.0
6.5
7.0
7.5
6.0
6.5
7.0
5.5
6.0
6.5
5.0
5.5
6.0
5.0
5.5
5.0
Numberviewings
of buyer offers
Number of buyer
(Indexed)
2.25
2.25
2.00
2.25
2.00
1.75
2.00
1.75
Number of sales agreed (Indexed)
Viewings per offer
Jun-16
Jun-16Jun-16
May-16
May-16
May-16
Jun-16
Jun-16Jun-16
May-16
May-16
May-16
Apr-16
Apr-16Apr-16
Mar-16
Mar-16Mar-16
Mar-16
Mar-16Mar-16
Apr-16
Apr-16Apr-16
Feb-16
Feb-16Feb-16
Feb-16
Feb-16Feb-16
9.0
Jan-16
Jan-16Jan-16
Number of buyer viewings
Jan-16
Jan-16Jan-16
Dec-15
Dec-15
Dec-15
160
Jun-16
Jun-16Jun-16
May-16
May-16
May-16
Apr-16
Apr-16Apr-16
Mar-16
Mar-16Mar-16
Feb-16
Feb-16Feb-16
Jan-16
Jan-16Jan-16
Dec-15
Dec-15
Dec-15
Nov-15
Nov-15Nov-15
80
140
100
60
120
80
120
180
140
100
160
120
Nov-15
Nov-15Nov-15
Number of buyer offers (Indexed)
Oct-15
Oct-15Oct-15
160
180
140
160
Dec-15
Dec-15
Dec-15
0
Sep-15
Sep-15Sep-15
180
Nov-15
Nov-15Nov-15
140
160
120
140
160
100
120
140
80
100
120
60
80
100
40
60
80
20
40
60
200
40
0
20
Oct-15
Oct-15Oct-15
0
Oct-15
Oct-15Oct-15
12
20
Sep-15
Sep-15Sep-15
40
100
60
20
80
40
0
60
20
40
0
Sep-15
Sep-15Sep-15
50
150
100
Aug-15
Aug-15
Aug-15
100
200
150
Aug-15
Aug-15
Aug-15
Jun-16
Jun-16Jun-16
May-16
May-16
May-16
Apr-16
Apr-16Apr-16
Mar-16
Mar-16Mar-16
Feb-16
Feb-16Feb-16
Jan-16
Jan-16Jan-16
Dec-15
Dec-15
Dec-15
Nov-15
Nov-15Nov-15
Oct-15
Oct-15Oct-15
Sep-15
Sep-15Sep-15
Aug-15
Aug-15
Aug-15
Jul-15
Jul-15 Jul-15
0
Aug-15
Aug-15
Aug-15
Number of instructions
Jul-15
Jul-15 Jul-15
Number of instructions
Jul-15
Jul-15 Jul-15
Jun-16
Jun-16
Jun-16
May-16
May-16
May-16
Apr-16
Apr-16
Apr-16
Mar-16
Mar-16
Mar-16
Feb-16
Feb-16
Feb-16
Jan-16
Jan-16
Jan-16
Dec-15
Dec-15
Dec-15
Number of instructions
Jul-15
Jul-15 Jul-15
Jun-16
Jun-16
Jun-16
May-16
May-16
May-16
Apr-16
Apr-16
Apr-16
Mar-16
Mar-16
Mar-16
Feb-16
Feb-16
Feb-16
Jan-16
Jan-16
Jan-16
Dec-15
Dec-15
Dec-15
Applicants registered
Apr-16
Apr-16
Apr-16
100
140
160
80
120
140
Nov-15
Nov-15
Nov-15
Applicants registered
Mar-16
Mar-16
Mar-16
Applicants registered per new instruction
Nov-15
Nov-15
Nov-15
Oct-15
Oct-15
Oct-15
Applicants registered
Feb-16
Feb-16
Feb-16
120
160
Jan-16
Jan-16
Jan-16
140
Dec-15
Dec-15
Dec-15
160
Nov-15
Nov-15
Nov-15
0
Oct-15
Oct-15
Oct-15
150
250
200
Oct-15
Oct-15
Oct-15
02
Sep-15
Sep-15
Sep-15
250
Sep-15
Sep-15
Sep-15
0
Number
of applicants registered and new instructions (Indexed)
Aug-15
Aug-15
Aug-15
50
0
Aug-15
Aug-15
Aug-15
Jul-15
Jul-15
Jul-15
200
250
Sep-15
Sep-15
Sep-15
10
12
8
1012
6
810
4
68
2
46
0
24
Jul-15
Jul-15
Jul-15
0
100
50
Aug-15
Aug-15
Aug-15
Jul-15
Jul-15
Jul-15
60
200
40
0
20
Number of buyer offers
Number of buyer offers
Number of buyer offers
Number of sales agreed
Number of sales agreed
Number of sales agreed
60
60
40
40
Estate Agency
Number of sales agreed
8.5
120
8.0
100
7.5
80
7.0
60
6.5
40
6.0
Viewings, offers and sales
Prices
MM As is to be expected in a market with reduced stock levels,
prospective purchasers continue to make competitive offers
with
the average number of offers per sale agreed remaining at
9.0
1.8.
8.5
8.0
MM With
stock levels down over 10% on June 2015, the shortage
7.5
of stock continues to present a challenge to homebuyers keen
7.0
to take their first, or next step, on the property ladder.
6.5
6.0
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
1.50
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jul-15
Aug-15
Sep-15
Oct-15
Nov-15
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
1.00
£230,000
£220,000
1.50
£200,000
£210,000
£190,000
1.25
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
£180,000
Offers per sale agreed
£230,000
Nov-15
1.75
1.75
£240,000
Nov-15
2.00
£240,000
2.00
£250,000
Oct-15
MM 2.25
June’s average property value represents an annual increase of
6% compared to June 2015.
£250,000
2.25
1.00
Oct-15
MM Whilst some activity levels have eased towards the end of the
quarter, the average house price continues to increase in line
with our forecasts achieving a 2% increase over the course of
Q2, with the average asking price reaching £255,917 by June
2016.
1.25
5.5
5.0
5.0
Sep-15
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
MM Viewings per offer of 7.9 remained in line with that seen last
year and only marginally down on the 8.0 experienced in Q1
2016.
Aug-15
5.5
20
0
Sep-15
Continued
9.0
140
Jul-15
160
0
Aug-15
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
0
Jul-15
20
20
£170,000
Average house price
7
The increased levels of demand for both new homes
and development land seen in the first quarter of this
year have tailed off throughout the second quarter
which is evidenced in the Connells Group front line
sales figures. At the half year point, the number of
new home sales is still up 2% on the same period in
2015. These figures represent a consolidation on the
high levels of growth seen in recent years.
Post-Brexit we anticipate that the volume of house sales
for the remainder of the year will be at similar levels
to those achieved in 2015 provided that new home
property supply levels are maintained by the house
building sector and there is no slowdown in production
due to market nervousness. In the first quarter, 11,300
residential applications were granted, down 1% on the
same period in 2015.
The outlook for the housing industry will be influenced
by stability in the financial markets and interest rates
look set to remain at their current low levels. If there is
any future movement, the Bank of England’s Monetary
Policy Committee is more likely to reduce rates than to
increase them. This could offer a boost to the housing
market and construction industry as cheaper mortgages
will fuel demand, albeit that this will impact on the
undersupply of housing across the UK.
Roger Barrett,
Group Land Director
Year to
date new
home sales
remained
2
%
ahead of the
same period
in 2015
9
Land & New Homes
Roger Barrett,
Group Land Director
2014
240
2015
2016
200
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
240
240
200
80
Average Weekly S
Average Weekly Sales
Average
Weekly Sales
Average
Weekly
Dec
In
Dec
Oct
Nov
Dec
Dec
Nov
Nov
Nov
Oct
OctOct
Sep
SepSep
Sep
Aug
Aug
Aug
Aug
Jun
Jul
JulJul
Jul
Jun
Jun
May
May
May
Apr
MayApr
Jun
Apr
0
0
AprMar
Mar
40
40
Feb
Feb
Feb
Mar
80
80
Mar
0
2016
2016
120
120
Jan
Jan
50
2016
2015
2015
160
160
150
40
100
0
2015
2014
2014
200
200
Average weekly sales
2014
250
250
250
200
2016
2015
2015
2016
2016
200
200
150
150
150
Average weekly instructions
Dec
Dec
Dec
Nov
Nov
Nov
Oct
Oct
Oct
Sep
Sep
Sep
Aug
Aug
Aug
JulJul
Jul
Jun
Jun
0
0
May
May
50
50
Jun
50
Average
Weekly In
Average
Weekly Instructions
Average Weekly Instructions
Apr
Apr
May
100
100
Apr
Mar
Mar
100
0
2015
2014
2014
Feb
Feb
MM By the end of July, the House of Lords Economic Affairs
Committee will publish a new report: Building More Homes.
The Committee’s wide ranging report will assess the scale of the
problem and it is hoped that it will make recommendations to
deal with the housing crisis. The report will also look at whether
the Government’s ambition to build a million new homes by
2020 is sufficient, or achievable.
2014
160
250
120
Mar
Housing supply
200
Feb
MM Year to date new home sales remained 2% ahead of the same
period in 2015.
240
MM There are no signs yet that supply of credit to the house building
industry is likely to be an issue in the coming months but, with
the outcome of the Brexit vote presenting our housebuilders with
additional
a need for additional
2014 challenges, there
2015 may well be2016
Government support at least in the short term.
Jan
Jan
MM Sales activity ended the quarter down 8% on Q1 2015, with
some investment buyers moving some of their buying activity
forward to Q1 2016 in advance of the changes to stamp duty.
Therefore, it was unlikely that the level of activity seen in Q1
would be maintained into Q2 however, this reduction was
primarily driven by the reduction in activity seen during June,
the month of the referendum.
0
Feb
MM Land and professional turnover levels in Q2 were similar to the
same period in 2015, albeit that a number of transactions were
carried over into Q3.
40
Jan
Sales activity
80
Jan
MM The number of new instructions fell by 4% compared to Q1
2016 driven by a drop in activity in April. The month of May
delivered a particularly strong performance and June was 3%
ahead of March 2016 and in line with June 2015.
Average Weekly S
MM Despite the political and economic uncertainties following
the Brexit result, the underlying need for more housing stock
remains. It will be interesting to see how the Government seeks
to maintain the momentum that had started to build around
the existing initiatives.
120
Jan
New buyers and instructions
160
As Q2 began, changes in stamp duty legislation
produced an increased number of instructions
onto the market compared to last year, rents have
remained relatively stable, despite the total number of
applicants reducing slightly year on year, and demand
still outstrips supply for the right properties. It was
interesting to witness that in the week of the EU
referendum, no discernible reduction in activity could
be seen and Q2 ended strongly.
This trend has continued into July with applicant
numbers at expected levels, added to which tenancies
continue to grow in length (averaging 22 months),
and landlords do not appear to be leaving the sector
despite the prospect of reducing tax allowances.
Stephen Nation,
Group Lettings Managing Director
16
Most
significantly,
the number
of new
instructions in
the quarter was
Q2
%
ahead of
2015
continuing the trend seen
at the start of the year
11
Residential Lettings
Stephen Nation,
Group Lettings Managing Director
New applicants and instructions
Regional rents
MM The new applicant and new instruction numbers in Q2
remained level with those seen in Q1, although both measures
saw increases compared to Q2 2015.
MM Despite the increased stock levels and easing of applicant
registrations, rents across all regions of England rose in the
quarter. All regions showed positive growth with London and
the South achieving the highest increases.
MM The market remains strong with June experiencing the highest
level of applicant registrations since July 2015.
MM Most significantly, the number of new instructions in the quarter
was 16% ahead of Q2 2015, continuing the trend seen at the
start of the year. With the increase in instructions outpacing the
increased applicant registrations, this provided some good news
for those seeking a property to rent.
MM The continued increase in new instructions during the quarter
has helped to drive our stock levels 5% higher than those seen
in Q1, providing a greater level of choice to prospective tenants.
MM The ratio of registered applicants to new instructions increased
slightly to 6.6, remaining below the 7.5 seen in Q2 2015.
MM London rents continue to remain significantly ahead of other
parts of the country, with average agreed rent at the end of the
quarter standing at £1,619, a 5% (£77) increase over March
2016, when the capital’s average rent stood at £1,542.
MM Rents remained steady within the Eastern & Central region,
increasing by £5 to £756 during the quarter. This being 1%
down on the £764 seen in June 2015.
MM The North peaked at £617 in June, up from £595 at the end of
Q1, and showing a 4% (£22) increase over June 2015.
MM Rental prices in the South achieved the highest gains in the
quarter, increasing by 6% (£54) and ending Q2 at £895, some
16% higher than June 2015.
MM With potential for the Brexit result to impact the residential sales
market, it will be interesting to see if there is a significant uplift
in letting activity in the coming quarter and the impact this may
have on average rents, particularly in London and the South.
120
80
100
60
80
60
£900
£875
£925
£850
£900
£825
£875
£800
£500
£0
£594
£601
North
Applicants registered per new instruction
£550
£575
£525
£550
£600
£625
£575
£600
£754
Eastern & Central
£450
£475
£450
South
Average agreed rents
£925
£850
£850
£790
£790
£730
London
£500
£525£859
£844
£475
£500
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Nov-15
Oct-15
Jun-16
Oct-15
Sep-15
May-16
Sep-15
Aug-15
Apr-16
Aug-15
Jun-16
Jun-16
£1,568 £1,616
Jun-16
Jun-16
£625
£650 Q2 2016
May-16
May-16
£650
May-16
May-16
Number of Agreed Tenancies (Indexed)
Apr-16
Apr-16
Average agreed rents (UK)
Apr-16
Apr-16
Mar-16
Mar-16
£1,500
£700
Feb-16
Feb-16
£700
£725
Jul-15
Mar-16
Jul-15
£686
Feb-16
£729
Jan-16
Jan-16
Q1 2016
Jan-16
£771
Number of agreed tenancies (Indexed)
Jun-16
Jun-16
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Nov-15
Oct-15
Oct-15
Jun-16
Sep-15
Sep-15
May-16
Feb-16
Jul-15
Jul-15
Mar-16
Aug-15
Aug-15
Apr-16
Jan-16
60
Dec-15
Dec-15
£744
Dec-15
180
160
Nov-15
Nov-15
£1,000
Nov-15
Jun-16 Jun-16
Oct-15
May-16 May-16
Sep-15
Apr-16 Apr-16
Aug-15
180
Oct-15
Oct-15
£2,000
Dec-15
£814
80
60
Sep-15
Sep-15
Number of Agreed Tenancies (Indexed)
Nov-15
£857
Aug-15
Aug-15
£600
Jun-16 Jun-16
Oct-15
£900
Jul-15
Jul-15
£643
Jun-16 Jun-16
67
Mar-16 Mar-16
Jul-15
£1,850
New applicants
£1,800
£1,750
New applicants
£1,700
£1,650
£1,600
£1,550
£1,500
£1,450
£1,400
£1,350
£1,300
May-16 May-16
78
May-16 May-16
Sep-15
89
Apr-16 Apr-16
Aug-15
25
75
Apr-16 Apr-16
50
100
Mar-16 Mar-16
Jul-15
100
150
75
125
Mar-16 Mar-16
125
175
Feb-16 Feb-16
Jan-16 Jan-16
Dec-15 Dec-15
Nov-15 Nov-15
New instructions
Feb-16 Feb-16
Jan-16 Jan-16
Dec-15 Dec-15
Nov-15 Nov-15
New instructions
Feb-16 Feb-16
180
140
160
120
140
100
Jan-16 Jan-16
160
Dec-15 Dec-15
180
Nov-15 Nov-15
150
200
Oct-15 Oct-15
Sep-15 Sep-15
Aug-15 Aug-15
Jul-15
175
Oct-15 Oct-15
Sep-15 Sep-15
Aug-15 Aug-15
New applicants registered and new instructions (Indexed)
Jul-15
200
Oct-15 Oct-15
Sep-15 Sep-15
5
Aug-15 Aug-15
56
Jul-15
0
Jul-15
25
Jul-15
0
50
Jul-15
Jun-1
Jun-16
May-1
May-16
Apr-1
Apr-16
Mar-1
Mar-16
Feb-1
Feb-16
Jan-1
Jan-16
Dec-1
Dec-15
Nov-1
Nov-15
Oct-1
Oct-15
Sep-1
Sep-15
Aug-1
Aug-15
Jul-1
Jul-15
5
Number of Agreed Tenancies (Indexed)
Number of Agreed Tenancies (Indexed)
160
140
140
120
120
100
100
80
9
£925
£900
£925
£875
£900
£850
£875
£825
£850
£800
£825
£775
£800
£750
£775
£725
£750
Residential Lettings
Number of Agreed Tenancies (Indexed)
£625
MM Activity levels, in terms of tenancies agreed during Q2, were 4%
higher than Q2 2015.
£925
£900
£850
£790
£900
Jun-16
Jun-16
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Jun-16
Jun-16
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Jun-16
Jun-16
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Nov-15
Average agreed rents (London)
North
Eastern & Central
South
London
Jun-16
May-16
£859
Apr-16
£844
Mar-16
£754
Feb-16
£744
Jan-16
£601
Dec-15
£594
Nov-15
Jun-16
Jun-16
£0
Q2 2016
£1,568 £1,616
Oct-15
May-16
May-16
£500
Q1 2016
Sep-15
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Sep-15
Aug-15
Aug-15
Jul-15
Jul-15
£600
£1,850
£1,800
£1,750
£1,700
£1,650
£1,600
£2,000
£1,550
£1,500
£1,450
£1,500
£1,400
£1,350
£1,000
£1,300
Aug-15
£625
Jul-15
£650
Average agreed rents (North)
Oct-15
Sep-15
Average agreed rents (South)
Average agreed rents (Eastern & Central)
£575
£1,850
£550
£1,800
£1,750
£525
£1,700
£500
£1,650
£1,600
£475
£1,550
£450
£1,500
£1,450
£1,400
£1,350
£1,300
Oct-15
£600
Sep-15
£643
Aug-15
£686
Aug-15
Jun-16
Jun-16
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Nov-15
Oct-15
Oct-15
Sep-15
Sep-15
Aug-15
Aug-15
Jul-15
Jul-15
£729
£550
Jul-15
£775
£730
£750
£857
£670
£814
£610
£771
Jul-15
£730
£900
£825
£790
£800
£550
Oct-15
£850
£850
£610
Sep-15
MM Average rents rose by 2% in the quarter and are now marginally
below Q2 last year. The average UK monthly rent for June was
£841 compared to £855 in June 2015.
£790
£875
£725
£670
£700
Nov-15
Jun-16
May-16
Apr-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
MM Although we saw some month on month reductions during the
£450
quarter, the number of agreed tenancies increased by 2% when
compared to Q1 2016.
Sep-15
Jun-16
Mar-16
Mar-16
May-16
Feb-16
Feb-16
Apr-16
Jan-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
£475
Jul-15
Agreed tenancies and average rents
Continued
Aug-15
£550
80
Aug-15
£625
120
£600
100
£575
Jul-15
£650
140
£1,850
£600
£1,800
£575
£1,750
£550
£1,700
£1,650
£525
£1,600
£500
£1,550
£1,500
£475
£1,450
£450
£1,400
£1,350
£1,300
Jul-15
160
£525
60
£500
Nov-15
Nov-15
£650
Oct-15
180
Oct-15
Oct-15
Sep-15
Sep-15
Aug-15
Aug-15
Jun-16
Jun-16
£550
Jul-15
Jul-15
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Jan-16
Jan-16
Feb-16
Dec-15
Dec-15
Nov-15
Nov-15
Oct-15
Sep-15
Sep-15
Oct-15
Aug-15
£700
Aug-15
£725
Jul-15
£750
£725
£610
£700
Jul-15
£800
5
£775
13
The market has been impacted by two material events
in 2016: stamp duty changes and the Brexit vote, yet
changes in the mortgage market often take a while
to have an impact. Whilst this is true of Brexit where
the indicators show a slight dampening of activity in
June but no material changes to date, the stamp duty
change in April brought forward buy-to-let business
into Q1 and as a result, Q2 has seen a material fall in
buy-to-let purchase business.
However, the good news is that the fall in buy-to-let
activity has been compensated for by a commensurate
growth in first-time buyer mortgage business. As a
result, overall volumes have remained steady, quarter
on quarter, and still well above 2015. It seems that
so far, the Government’s aim of reducing buy-to-let
investors activity to create space for more first-time
buyers is working. However, it is early days and other
factors including Brexit, potential rate changes and
political turmoil could change this picture during Q3.
Early signs in July would suggest more of the same,
volumes recovering to pre-Brexit levels, buy-tolet purchase business remaining very subdued and
residential business tracking positively. If a rate cut is
forthcoming, as increasingly predicted, this should
boost the residential market further but also encourage
more existing mortgage holders to remortgage, as the
differential between new rates and standard variable
rates (assuming there is little lender movement as
expected) widens.
Adrian Scott,
Group Mortgage Services Director
18
Home-mover
mortgage activity
grew by
%
in the quarter
and by 8% on
an annual basis
15
Adrian Scott,
Group Mortgage Services Director
Residential
Number of first-time buyers
Number of Residential remortgages
Number of homemovers
400
160
May-16
Apr-16
Mar-16
Feb-16
Number of buy-to-let remortgages
Jan-16
Dec-15
250
Number of residential mortgages by type (Indexed)
Nov-15
0
Number of buy-to-let purchases
Jun-16
Jun-16
80
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
160
Oct-15
240
0
Sep-15
320
80
Oct-15
MM The remortgage sector remains particularly active and has delivered
year on year growth of 49% at the end of the first six months of
2016.
320
480
240
Aug-15
MM The first-time buyer market followed a similar pattern and remained
strong throughout the quarter, ending 25% up on Q1 and 40% up
on Q2 2015.
Number of homemovers
Aug-15
MM Home-mover mortgage activity grew by 18% in the quarter and by
8% on an annual basis.
Number of first-time buyers
Number of Residential remortgages
400
Jul-15
MM A particular feature throughout Q2 was the consistency of activity
across all mortgage types and with no material drop experienced in
June. Indeed June 2016 was 3% ahead of March 2016.
480
Jul-15
MM Following the strong start to the year, the mortgage market
continued to operate ahead of levels seen in 2015.
Sep-15
Mortgages
200
Jun-16
Jun-16
May-16
Feb-16
Feb-16
May-16
Jan-16
Jan-16
Apr-16
Dec-15
Dec-15
Apr-16
Nov-15
Nov-15
Mar-16
Oct-15
Oct-15
Mar-16
Sep-15
-16
-16
r-16
r-16
-16
-16
-15
-15
Number of buy-to-let mortgages by type (Indexed)
t-15
£145,000
£140,000
£135,000
£130,000
£125,000
£120,000
£145,000
£115,000
£140,000
£135,000
£110,000
£130,000
£105,000
£125,000
£100,000
£120,000
£95,000
£115,000
-15
0
Sep-15
50
Aug-15
Jul-15
0
100
Aug-15
MM The number of buy-to-let remortgages reduced to a lesser extent
with Q2 down 7% on Q1 2016.
50
150
-15
MM Buy-to-let purchase activity reduced significantly in the quarter, by
37% compared to Q1 and with a similar reduction of 35% when
compared to Q2 2015.
Number of buy-to-let purchases
100
200
Jul-15
MM With Q1 2016 uplifted by the additional activity from investors
seeking to avoid the stamp duty changes, the buy-to-let mortgage
market experienced the anticipated reduction in activity during Q2,
ending the first six months of 2016 on a par with 2015 overall.
Number of buy-to-let remortgages
150
250
l-15
Buy to let
FTB
Home Mover
BTL Remortgages
BTL Purchases
Remortgages
Other
29%
8%
10%
27%
2%
FTB
480
Home Mover
400
BTL Remortgages
BTL Purchases
320
Remortgages
240
Other
Number of first-time buyers
Number of Residential remortgages
Number of homemovers
First-time buyers
Home Mover
Buy-to-let Remortgages
Buy-to-let Purchases
21%
Remortgages
Other
Number of buy-to-let remortgages
250
Jun-16
May-16
Apr-16
Mortgage type split
UK Q1 2016
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
14%
10%
UK Q1 2016
FTB
Home Mover
BTL Remortgages
BTL Purchases
Remortgages
Other
24%
1%
Mortgage values
Mortgage terms
150
M20%
M The typical mortgage length FTB
has seen a slight increase
34%
in Q2, ending
the quarter at Home
26.3Mover
years, having steadily
BTL Remortgages
increased over the past 12 months.
8%
BTL Purchases
MM Mortgage values continue to climb steadily and broadly in
line with average house price growth.
100
27%
Jun-16
May-16
Apr-16
Remortgages
Other
9%
UK Q2 2016
26
25
24
23
22
1%
37%
FTB
Home Mover
BTL Remortgages
BTL Purchases
Average mortgage term (Years)
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
20
Jul-15
Jun-16
May-16
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
21
Average mortgage value
19%
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Jul-15
£145,000
£140,000
£135,000
£130,000
£125,000
£120,000
£115,000
£110,000
£105,000
£100,000
£95,000
Aug-15
M
50 M Mortgage values averaged £147,010 in the second quarter
of the year maintaining the level of increase seen in Q1,
0
with the measure up by 3% (£4,576) compared to the
previous quarter, and 7% (£9,276) on Q2 2015.
7%
29%
Number of buy-to-let purchases
200
ages
es
1%
Jun-16
0
Jul-15
80
2%
Mortgage type split
UK Q2 2016
160
Jul-15
ages
es
23%
UK Q2 2016
17
19%
20%
22%
1%
1%
2%
30%
37%
38%
7%
6%
9%
7%
7%
15% 27%
28%
22%
Mortgages
FTB
FTB
FTB
Home
Mover
Home
Home Mover
Mover
BTL
Remortgages
BTL
BTL Remortgages
Remortgages
BTL
Purchases
BTL
Purchases
BTL Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
FTB
FTB
FTB Mover
Home
Home
Home
Mover
Mover
BTL
Remortgages
BTL
BTLRemortgages
Remortgages
BTL
Purchases
BTL
BTLPurchases
Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
FTB
FTB
FTB
Home
Mover
Home
Home Mover
Mover
BTL
Remortgages
BTL
BTL Remortgages
Remortgages
BTL
Purchases
BTL
Purchases
BTL Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
Scotland/North
1%
FTB
FTB
FTB Mover
Home
Home
Home
Mover
Mover
BTL
Remortgages
BTL
BTLRemortgages
Remortgages
BTL
Purchases
BTL
BTLPurchases
Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
20%
22%
21%
Continued
3%
2%
1%
1%
14% 2%
18%
23%
29%
35%
38%
9%
10%
9%
8%
10%
10%
29%26%27%
North
Q1
2016
South
West
Q1 2016
London
Q1
2016
Mortgage type split
Q2 2016 North Q1 2016
North
North Q1
Q1 2016
2016
First-time buyer
Home Mover
Buy-to-let Remortgages
Buy-to-let Purchases
Remortgages
Other
Eastern
2%
1%
30%
29%
38%
6%
9%
7%
14%
15%
10%27%
22%
24%
FTB
FTB
FTB
Home
Mover
Home
Home Mover
Mover
BTL
Remortgages
BTL
BTL Remortgages
Remortgages
BTL
Purchases
BTL
BTL Purchases
Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
Midlands Q1 2016
Midlands
Midlands Q1
Q1 2016
2016
South
West
Q1 2016
London
Q1 2016
Regional
picture
UK Q1 2016
London
2%
1%
1%
18%
23%
20%
10%
8%
8%
10%
9%
10%
MM With buy-to-let activity reducing, we have seen both
the Midlands
first-timeQ1buyer
2016 and home-mover sectors account
Eastern Q1
2016
East
Q1 2016 of activity in the second quarter
for aSouth
larger
proportion
of 2016. First-time buyer activity accounted for over a
third of activity in the quarter, up 5% on Q1 2016 and,
whilst this may be a short lived distortion, the year to
date position shows first-time buyer activity accounting
for 32% of transactions, up 2% on 2015. It will be
interesting to see what impact the increased prospect
of an interest rate reduction in the coming quarter may
have on the split of activity in the market.
1%
2%
Midlands
FTB
FTB
FTB Mover
Home
Home
Home
Mover
Mover
BTL
Remortgages
BTL
BTLRemortgages
Remortgages
BTL
Purchases
BTL
BTLPurchases
Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
UK mortgage type split
1%
2%
29%
35%
34%
26%27%
27%
FTB
FTB
FTB
Home
Mover
Home
Home Mover
Mover
BTL
Remortgages
BTL
BTL Remortgages
Remortgages
BTL
Purchases
BTL
BTL Purchases
Purchases
Remortgages
Remortgages
Remortgages
Other
Other
Other
Wales/South West
South West Q1 2016
South
South West
West Q1
Q1 2016
2016
MM First-time buyer activity was strongest in the South
West (38%) and weakest in London (22%); the North
had the highest proportion of home mover activity
(28%), with the smallest proportion located in London
(22%). For those seeking to remortgage, the East had
the highest relative amount of activity (23%), while the
South West continued to see the quietest remortgaging
activity (19%). Proportionately, London continues to
lead the buy-to-let boom, with the capital boasting the
highest
proportion of buy-to-let remortgages (15%)
Eastern Q1 2016
East Q1
2016
andSouth
buy-to-let
purchases
(9%). The buy-to-let purchase
UK Q2
2016
market
was
weakest in the South West (6%).
South East
1%
FTB
FTB
FTB Mover
Home
21%
22%
2%
30%
29%
FTB
FTB
Home
Home Mover
Mover
London Q1 2016
Figures for Q2 repossessions are not published until
mid-August, however, our own data suggests that
levels of new repossessions have remained static
during Q2 and figures are almost identical for the same
period in 2015.
The number of repossessions in the first quarter of
2016 was 2,100 (1,500 home-owner, 600 buy-to-let),
meaning that the repossession rate is the lowest on
record, according to the Council of Mortgage Lenders.
If this rate continues throughout 2016, it would put
the annual number of repossessions at 8,400, lower
than any year since 1982 (but in 1982 there were only
6.9 million mortgages, against 11.1 million mortgages
today).
Mortgage arrears also continued to fall. For the first
time in more than a decade, the number of mortgages
in arrears of 2.5% or more fell below the 100,000 mark,
with 96,200 loans in arrears at the end of March, down
from 101,700 at the end of December, and 111,200 at
the end of the first quarter of 2015. Even the number
of mortgages in the most serious arrears band of 10%
or more, which has remained fairly static while the
lower arrears bands have declined, fell a little during
the quarter.
Following the rush to beat changes to the stamp
duty deadline in April, sales have returned to normal
levels. Sale price performance vs valuation continued
to be very strong in Q2. The Brexit result could affect
buyer confidence, with competition amongst buyers
potentially most affected, especially in “best bid”
scenarios.
During Q2 we have launched a number of pilots with
our lender clients for our Assisted Sales Scheme (ASS).
The ASS is offered to customers who have reached, or
are reaching, the end of their interest only term with
no vehicle for repayment.
Simon Matthews,
Managing Director of AMG
Homebuyer/Condition Report/Flat
Mortgage/Remortgage Valuation/House
BTL Mortgage Valuation/Bungalow
Homebuyer/Condition Report/Flat
41%
Repossession
Valuation/Apartment
BTL Mortgage Valuation/Bungalow
Building Survey/Land
Repossession Valuation/Apartment
Other
Building Survey/Land
Other
11%
New Instructions
19
Asset Management
Simon Matthews,
Managing Director of AMG
New instructions
%Mortgage/Remortgage Valuation/House
MM Houses accounted for 69% of new instructions during Q2
2016, the same as in Q1 2016.
Homebuyer/Condition Report/FlatMortgage/Remortgage Valuation/House
BTL Mortgage Valuation/Bungalow
Homebuyer/Condition Report/Flat
MM Overall, the profile of new instructions remained in line with
40%
Repossession Valuation/Apartment
BTL Mortgage Valuation/Bungalow
Q1 2016, with flats accounting for 24% of total new business.
Building Survey/Land
Repossession Valuation/Apartment
Bungalows saw an uptick to 8% in June, 2% above June
Other
Building Survey/Land
2015.
Other
MM Houses continue to account for the majority of new
instructions in Q2, 3% higher than Q2 2015.
18%
New Instructions
Cash
First-time buyer
Nothing to sell
Buy-to-let/Chain
Other
Purchase type
Completions by purchaser type (Q2 2016)
MM Cash continues to account for the largest proportion of
distressed completions in Q2, with 39% of all repossessed
properties purchased by cash buyers – dropping 2% from Q1
2016.
Cash
First-time buyer
Nothing to sell
Buy-to-let
Chain
Other
MM First-time buyers remain keen to step onto the property ladder
with their activity accounting for 17% of purchases. This was
Mortgage/Remortgage Valuation/House
a marked increase on the 11% of Q1 and well ahead of the
Homebuyer/Condition Report/Flat
12% seen in Q2 2015.
BTL Mortgage Valuation/Bungalow
Mortgage/Remortgage
Valuation
Repossession Valuation/Apartment
MM Buy-to-let investor activity was slightly below historical levels,
Homebuyer/Condition Report
down 1% in the quarter to 6%.
Building Survey/Land
BTL Mortgage Valuation
Other
100%
Repossession Valuation
Building Survey
Other
Completions by purchaser type (Q1 2016)
Completions by P
Q2 delivered some strong results in the survey and
valuation sector, contributing to an 11% rise, year
to date, in transaction levels. This reflects the strong
housing market and increased lending levels over the
period.
Over the last quarter we saw this rise in transactions
manifest itself in an increased divergence in the
performance of surveying firms across the sector. For
example, Connells Survey & Valuation delivered a
significantly faster reporting service, 4.4 day average
in June and 26% better than the market. Alongside
this, our reporting service quality was sustained at
an average 91% for the quarter, compared with 78%
across the market.
Whilst it is very early days and we have yet to see any
major new trends established, the EU referendum result
does appear to have impacted activity in the sector,
with daily transaction volumes down c.10% on recent
highs. Based on market activity overall, we have no
evidence to suggest there will be a significant sustained
drop in house prices. We think it more likely that there
may be an easing in the level of house price inflation in
the short term.
Regardless of any Brexit impact the markets will adjust
and current uncertainty will subside. We expect that
the summer months will test the industry further
in maintaining service standards, with the usual
challenges experienced from delayed property access
and limited surveyor availability given the peak holiday
period. Overall, we retain a positive outlook for the
coming quarter.
Ross Bowen,
Managing Director,
Connells Survey & Valuation
21
Survey & Valuation
Ross Bowen,
Managing Director,
Connells Survey & Valuation
Mortgage valuations
Average valuation
MM A strong Q2 performance resulted in the number of mortgage
valuations rising 7% on Q1 2015, and 11% when compared to
Q2 2015. June delivered a particularly positive result being 10%
ahead of June 2015.
MM Average house prices recorded by estate agents have continued
to rise and we have seen similar increases during this quarter.
The average valuation price at the end of Q2 was 3% higher
than the end of Q1 2016, and on an annual basis 7% ahead of
June 2015.
MM In line with the consistent activity seen in the mortgage sector,
our volumes have been rising steadily during the first half of the
year.
MM Repossession valuations continue at very low levels and are
down 29% on the first six months of 2015.
Surveys
MM Although the number of surveys carried out in June was down
7% compared to June 2015, the segment continued to show
annual growth, up 3% on Q2 2015.
MM Surveys as a percentage of overall activity reduced by 1%
compared to the first six months of 2015 however, year to date
surveys remain ahead of 2015 in volume terms.
Buy to let
MM As expected, investor and landlord activity reduced by 30% in
the quarter with buy-to-let valuations dropping back to levels
similar to Q2 2015. This reduction reflects the overall dynamics
of the buy-to-let market this year.
MM June experienced a drop of 10% in buy-to-let valuations as
compared to last year, but year to date we remain 35% ahead
of 2015.
MM The average property valuation in Q2 was £260,846, up 7%
(£17,371) on Q2 2015.
Service experience
MM Average reporting turnaround time of 4.3 days was achieved
in Q2, a 0.1 day improvement on Q1 and well ahead of the Q2
market average of 5.6 days.
MM The level of post valuation queries, one of the key measures of
service quality, remained below 9% throughout the quarter.
£200,000
74%
£230,000
12%
£220,000
11%
£210,000
Mortgage/Remortgage Valuation
Homebuyer/Condition Report
1000
BTL Mortgage Valuation
Repossession Valuation
Building Survey800
Other
20
18
18
Number of surveys (Indexed)
Number of BTL Valuations
Sep-15
Sep-15
Post valuation queries
25
22
22
20
Jun-16
Jun-16
Jun-16
Jun-16
29
27
27
25
May-16
May-16
34
31
31
29
May-16
May-16
Number of Repossession Valuations
Number of Repossession Valuations
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Nov-15
Oct-15
Oct-15
Sep-15
Sep-15
Aug-15
Aug-15
Connells S&V
Connells S&V
Apr-16
Apr-16
Jun-16
May-16
Apr-16
Jun-16
Jun-16
May-16
May-16
Apr-16
Apr-16
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Nov-15
Nov-15
Oct-15
Oct-15
Sep-15
Sep-15
Aug-15
Aug-15
Jul-15
Jul-15
Apr-16
Mar-16
Feb-16
Jan-16
Dec-15
Nov-15
Oct-15
Sep-15
Aug-15
Jul-15
Jun-16
May-16
Connells S&V
Connells S&V
Mar-16
Mar-16
Feb-16
Feb-16
Jan-16
Jan-16
Dec-15
Dec-15
Number of Surveys38
38
36
36
34
Nov-15
Nov-15
600
£250,000
Jun-16
Oct-15
Oct-15
May-16
150
Apr-16
Jul-15
Jul-15
25%
25%
20%
20%
Number of Mortgage Valuations
15%
15%
10%
10%
5%
5%
0%
0%
Aug-15
Aug-15
200
Mar-16
45
100
Mar-16
90
150
Feb-16
Number of Surveys
7
7
6
6
5
5
4
4
2
2
1
1
0
0
Jul-15
Jul-15
Jun-16 Jun-16
May-16 May-16
Apr-16 Apr-16
Mar-16 Mar-16
Feb-16 Feb-16
Jan-16 Jan-16
Number of Mortgage Valuations
Feb-16
400
£240,000
Jan-16
135
Dec-15
Jun-16 Jun-16
May-16 May-16
180
Nov-15
Oct-15
Apr-16 Apr-16
400
Jan-16
Jun-16
May-16
Sep-15
Mar-16 Mar-16
800
100
Dec-15
Jun-16
Apr-16
Number ofvaluations
BTL Valuations (Indexed)
Number of buy-to-let
0
Aug-15
Feb-16 Feb-16
Number of BTL Valuations
Nov-15
Oct-15
May-16
Apr-16
Mar-16
Jul-15
Jan-16 Jan-16
Dec-15 Dec-15
Nov-15 Nov-15
Oct-15 Oct-15
Sep-15 Sep-15
Aug-15 Aug-15
Number of mortgage valuations (Indexed)
-16
-16
0
Sep-15
50
Aug-15
Feb-16
100
-16
1%
1% 1%
45
-16
£260,000
90
Mar-16
£230,000
200
Feb-16
800
£260,000
Jul-15
Jan-16
Dec-15 Dec-15
600
50
-16
Jan-16
Dec-15 Dec-15
Nov-15 Nov-15
Oct-15 Oct-15
Sep-15 Sep-15
150
1000
Nov-15 Nov-15
Oct-15 Oct-15
Sep-15 Sep-15
Aug-15 Aug-15
200
-16
£240,000
Jul-15
135
200
-15
£250,000
Jul-15
180
-15
£200,000
0
-15
£210,000
-15
£220,000
Aug-15 Aug-15
1000
-15
0
Jul-15
0
200
Jul-15
0
Jul-15
500
Jul-15
0
-15
45
Market
Market
Turnaround-time
Number of Surveys
Market
Market
23
Average house prices, mortgage
values & rents: Q2 2016
Average mortgage value Q2 2016
£147,010
3
Up
%
from Q1 2016
(£137,734)
Up 7% from Q2 2015 (£137,734)
Average rent (North)
£601
Average rent (East & Central)
£754
Average rent (London)
Average house price Q2 2016
£255,917
4
Up
%
from Q1 2016
(£245,650)
Up 9% from Q2 2015 (£234,447)
£1,616
Average rent (South)
£859
Economic Outlook
With continued growth forecast and sustained consumer confidence, the economic
outlook for the UK at the end of the first quarter remained positive, despite economic
indicators in some overseas markets faltering. The EU referendum sat poised on the
horizon, providing the potential for short term distraction and an opportunity for the
country to confirm its chosen path for the future.
In advance of the referendum, both those for and against Brexit made much of the potential
economic impact that Brexit would bring. And, whilst the nature and scale of this varied greatly,
the general consensus agreed that a vote for Brexit would lead to a reduction in economic
growth in the short term as both investment and consumption would be directly impacted by the
increased uncertainty that would follow. Long term prospects would also be impacted by any
decisions by businesses to delay or curtail their investment activity.
With the Brexit decision made, and additional political uncertainties introduced, the markets
reacted as expected with heavy falls seen in both stock and currency prices. Whilst this short
term reaction has impacted different industry sectors in different ways, there has already been a
noticeable impact on those within the property sector.
The financial markets are resilient and there are already signs that some of these initial falls may be
short lived. However, the Governor of the Bank of England has acknowledged that the economic
outlook for the UK has deteriorated, and with no ‘silver bullet’ uncertainty is likely to remain a
feature for many months as the economic outlook for the UK remains unsettled.
The extent to which the projected economic impacts will or will not materialise remains to
be seen; but policymakers have signalled their intent to provide fresh monetary stimulus to
the economy through the injection of extra capital to support lending to UK households and
businesses.
We would expect some of the short term uncertainties to clear in the coming quarter, and with
continued Government support for housebuilders, and demand for housing remaining high, there
could yet be some upside to the housing market later this year.
25
Methodology
Connells Group analyses detailed data from its estate agency, land & new homes, lettings, mortgage, survey
and valuation and asset management businesses from October 2012 to today. Each month, the researchers
analyse tens of thousands of registrations, instructions, applications, approvals and valuations and use these
trends to publish a quarterly report which reflects trends across the entire property spectrum. Where commercial
sensitivity may be an issue, figures are indexed to show trends without publishing raw data.
CONFIDENTIAL
This report is produced for illustration purposes and is indicative only.
No responsibility is accepted for reliance on this report. You should always seek independent professional advice.
Statistics and extrapolations obtained from various sources. These are not always referenced and may not be
comprehensive. E&O excepted.
© Copyright Connells Limited 2013 – 2016. All rights reserved.
About Us
Connells Group is one of the largest and most successful estate
agency and property services providers in the UK. Founded in 1936
and with a network of over 580 branches nationwide, the Group
combines residential sales and lettings expertise with a range of
consumer and corporate services including new homes, mortgage
services, conveyancing, EPC provision, surveying, corporate lettings,
asset management, land & planning, LPA receivers and auctions.
Alongside the Connells brand, the Group trades under other well-known and
trusted local names including Allen & Harris, Bagshaws Residential, Barnard
Marcus, Brown & Merry, Fox & Sons, Jones & Chapman, Manners & Harrison,
Roger Platt, Shipways, Swetenhams, William H Brown, Sharman Quinney,
Pattison Lane, Burchell Edwards, Ashley Adams, Atkinson Stilgoe, Peter Alan,
Thomas George, Rook Matthews Sayer, Paul Dubberley, Gilbert & Thomas,
Hurfords, Knight Partnership, Hatched.co.uk and Gascoigne Halman.
Corporate clients benefit from Connells’ broad range of award-winning
services and depth of experience and expertise.
We work with some of the UK’s leading organisations and institutions on
property and land acquisition and disposal, asset management, mortgage
sales and distribution, corporate lettings, auctions, conveyancing and
surveying, to name a few.
The Connells Group is a subsidiary of the Skipton Building Society, one of the
UK’s largest providers of financial services and products.
connellsgroup.co.uk
@connellsgroup
Our Estate Agency Brands
Our Business Brands
Contacts
Estate Agency
Mortgages
For more information, please contact David Plumtree,
Group Chief Executive (Estate Agency) on 01525 218669
or email [email protected]
For more information, please contact Karen Faulkner,
Mortgage Services Development Manager on
01525 218669 or email [email protected]
Land & New Homes
Asset Management
For more information, please contact Roger Barrett,
Group Land Director on 01604 622444
or email [email protected]
For more information, please contact Simon Matthews,
Managing Director of AMG on 01483 456231
or email [email protected]
Residential Lettings
Survey & Valuation
For more information, please contact Stephen Nation,
Group Lettings Managing Director on 01525 218669
or email [email protected]
For more information, please contact Ross Bowen,
Managing Director of Connells Survey & Valuation on
01525 218630 or email [email protected]
connellsgroup.co.uk
@connellsgroup