2022-06-22-莱坊-UK_Residential_Property_Market_Update_June_2022_2页_274kb

UK Residential Property Market Update Summary (June 2022)

Core Content

The UK residential property market experienced a cooling trend in May 2022, with signs of moderation emerging as the impact of pandemic-driven factors like the "race for space" waned and living costs rose. The market is showing signs of a peak in price growth, with both the Nationwide and Halifax indices registering a decline in their annual growth rates for the second consecutive month.

Key Trends

• House Price Growth:

  • The average home price increased by 11.2% in May 2022 (annual basis), down from 12.1% in April.
  • Halifax reported an annual growth rate of 10.5%, compared to 10.8% in April.
  • This marks the second consecutive month of declining growth, suggesting that the market may have reached its peak.

• Buyer Demand:

  • New buyer enquires had a net balance of -7% in May, down from +8% in April, ending eight consecutive months of growth.
  • Knight Frank data indicates that demand remains resilient, with new prospective buyers 42% above the five-year average (excluding 2020) in May.

• Mortgage Approvals:

  • Mortgage approvals for purchase dropped to 67,000, a two-year low, signaling a potential slowdown in future demand.

• Market Sentiment:

  • The IHS Markit household sentiment index showed a decline in both current and future house price expectations.
  • Current value scores dropped from +61 to +59, and future value scores fell from +66 to +64.

Prime London Market

• Sales:

  • The prime London property market is in a strong position, with demand recovering post-pandemic.
  • The number of new prospective buyers in London reached the third highest in a decade.
  • Supply is also increasing, with new sales instructions at the sixth highest level in ten years.
  • The number of offers accepted in May was the highest monthly figure in a decade.

• Lettings:

  • The prime London lettings market faces challenges, with tenants likely to experience a frustrating period this summer.
  • Supply may begin to loosen slightly due to:
    • More owners choosing to let their properties after failing to sell at desired prices.
    • Increased tenant churn as more workers change jobs or leave the UK for better opportunities.

Country Market

• Demand and Prices:

  • Property markets outside London saw a surge in demand and prices during the pandemic as people re-evaluated their living arrangements.
  • However, supply failed to keep pace, leading to a low supply situation and frustrated sellers.

• Market Balance:

  • In May, the ratio of new prospective buyers to new sales instructions was 7.1, the lowest since December 2020, indicating a more balanced market.
  • The number of new sales instructions in the country market was the sixth highest in a decade, showing a growing supply.

Quarterly Price Change (Three Months to May 2022)

Q1 2022 Price Changes

Contact Information

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

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

Additional Information

• Knight Frank Research Reports are available at knightfrank.com/research.
• Knight Frank LLP provides strategic advice and consultancy services to a wide range of clients globally.
• The report is for general information only and should not be relied upon for any specific decision.