London Market Overview
January Nationwide House Price Index saw the annual rate of house price growth slow modestly to 6.4%, from 7.3% in December.
London is the only region to register more supply. The majority of supply is flats, as owners look for more space and/or investors are looking to sell homes, the result of falling rents and potential changes to capital gains tax (Zoopla).
House prices fell by 0.3% month-on-month (seasonally adjusted), the first monthly decline since June 2019.
29,400 transactions (seasonally adjusted) were recorded in December 2020, 31.5% higher than December 2019. A monthly increase of 13.1% (HMRC).
HMRC estimated transactions for 2020 were -11.5% below 2019 figures. Rightmove reported 10% more sales agreed in 2020 than in 2019 and Zoopla reported 9%. We should see these complete over the next few months.
613,000 properties sold subject to contract are still awaiting legal completion and Rightmove estimate 100,000 will miss the stamp duty holiday deadline.
103,381 mortgages were approved in December 2020, over 50% higher than in December 2019 and at £24.2 billion, gross lending was at its highest monthly figure since March 2016. Year-on-year mortgage approvals in 2020 were up 3.7% on 2019 (Bank of England), although the value of lending was 10% lower.
Demand for homes is up 13% on this time last year and new sales agreed are up 8%. Supply does not match the increase in demand, with 7% fewer homes for sale than a year ago. This imbalance is putting upward pressure on house prices (Zoopla).