connells group market report reports/2016_02_0… · quarter 4, 2015. introduction 3 estate agency...

Connells Group Market Reportconnellsgroup.co.uk Quarter 4, 2015

Introduction 3Estate agency 4 - 7Land and new homes 8 - 9Residential lettings 10 - 13Mortgages 14 - 17Asset management 18 - 19Survey and valuation 20 - 22Economic outlook 23 - 24Methodology 25About us 26 - 27Contacts 28

Contents

Our figures for the final quarter of 2015 reveal a property market whose fundamentals remain strong and provide cause for optimism as we enter 2016. Whilst uncertainties persist in some sectors of the market our business delivered another strong and consistent performance, selling more than 2014, and 2013.

In stark contrast to 2014 our activity levels remained healthy throughout the last quarter of the year with October providing a particularly strong start to the quarter, with sales activity up 16% on 2014, before the inevitable seasonal slowdown took hold in December. The performance provides us with a much healthier pipeline position as we enter 2016, and this combined with the favourable conversion to income achieved in this quarter provides us with a great foundation for enhanced returns in 2016 even if the volume of house sales remain fairly consistent with 2015.

Instructions and sales are the most notable features of 2015, with demand continuing to outstrip supply. Prospective vendors remain hesitant to enter the market despite the favourable market conditions, and with the buoyant sales levels set to continue, those seeking to get a foot on the property ladder or make their next move can struggle due to the lack of available properties. Stock levels across the market remain challenging with Rightmove reporting that the average stock per branch, including under those sold subject to contract, now stands at 53 properties having reduced from 57 per branch in December 2014. Our own figures compare favourably against our competitors but bringing fresh properties to the market remains a key focus.

Whilst house price inflation and rent growth tempered slightly at the end of the year the level of applicant registrations per new instruction highlight that demand outstripping supply looks set to remain a feature of the market as we enter 2016. Our branches have already reported a brisk and positive start to the year following an increase in enquiries between the Christmas and New Year holidays.

House prices increased by an average of 8% in 2015 and there is every chance that we could see similar, if not slightly higher, increases in 2016. The positive nationwide economic conditions – such as rising real-terms wages, low inflation and high consumer confidence – should continue to drive activity over the next few quarters albeit that the continued shortfall in stock will influence prices and overall transaction levels. With Housing remaining firmly on the political agenda we expect to see further government intervention to stimulate growth of

supply, we are starting to see positive signs from the housebuilding community but these initiatives will take time to deliver - the transaction volumes of the heady heights of 2007 look set to remain a distant memory for some time yet.

Mortgage activity levels continued to exceed those seen in 2014, with the business achieving good annual growth. The underlying outlook remains positive with increasing lender confidence, some positive movements in the First Time Buyer sector and the low cost of borrowing set to continue. The average mortgage size is also continuing to rise – broadly in line with rises in average home values – and there still appears to be plenty of Lender appetite to make owning a first-time home a reality rather than a distant dream. Any interest rate rises seem to have been deferred for the foreseeable.

The BTL market is the current ‘worry bead’, but in my view the risks are small. The 3% Stamp Duty surcharge may pull some activity into Q1 but in the context of strong house price inflation; this will likely be covered after 4 months of ownership! Likewise with the tax relief change, this does not affect cash buyers or basic rate tax payers, so the only impact is higher rate tax payers, to the tune of the difference between higher and basic rate on the mortgage interest. Again overblown but a perception issue that should dispel over time.

2015 was another successful year for our Land & New Homes operation. In maintaining our leading position in this key sector we increased our sales by over 40%, selling more New Homes than any other Estate Agent. We continue to invest in the dedicated teams that support our key Developer clients to assist in maximising sales, ensuring that we remain the partner of choice. Central Government drive to encourage more building can only be helpful to this sector.

Our business is poised for a strong start to 2016 building upon the strong close to 2015. In fact in January we have sold more houses than in January last year, indeed more than the very strong January of 2014. As any good Estate Agent will tell you “There has never been a better time to buy”!!

Introduction David Livesey, Group Chief Executive

3

...our business is poised for a strong start to 2016...

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecAverage Weekly Gross Sales 300 300 300 300

Jan

Feb

Mar

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

n 2015

n 2014

Average weekly gross sales

There remains plenty of reason to be optimistic about the underlying strength of the house purchase market. Due to the strength of buyer demand and the relative shortage of property on the market, we continue to see steady house price growth, an indicator of both continuing confidence in the property market and a healthy economic climate.

The signs are that buyer demand will further develop in the first quarter of 2016 and the urgency from buy-to-let investors to complete their purchases before the changes to stamp duty will only create even further momentum within the market place. The prospects of an early increase in base rates appears to have abated and this removes what was a potential barrier to continued positivity in the market place.

David Plumtree, Group Chief Executive (Estate Agency)

the average UK home value saw a rise of

between

&Q4 2014Q4 20158%

New buyers and instructions M As normal, we saw instruction levels gradually decline

throughout November and then the usual seasonal reduction in December, however, the number of new instructions for the quarter was up by 10% on Q4 2014.

M Q4 saw the number of new buyers registering grow by 48% compared to Q4 2014. In particular we saw activity levels across our branch network noticeably up on what we traditionally see in December and this was partly attributable to an increase in buy-to-let investor registrations, due to the impending changes to Stamp Duty.

M The number of applicants registered per new instruction in the final quarter of 2015 performed strongly, rising month-on-month throughout the quarter to reach a peak in December of 10.3 applicants per new instruction. This strong showing meant that Q4 2015 experienced a 27% quarterly and 36% annual increase in applicants registered per new instructions coming to the market.

M The high number of registered applicants per new instruction – particularly in December – indicates that home-buyers are preparing for a busy first quarter of 2016 and this will certainly create more upwards movement in house prices.

Viewings M The number of buyer viewings remained largely stable in the

first two months of Q4, before following the usual pattern of dropping sharply in December. This meant the quarter saw a 17% drop in the number of viewings compared to Q3 2015. However, on an annual basis, the number of viewings rose by 12%.

Offers M The December slowdown also affected the number of buyer

offers in Q4, with the quarter’s total figure representing a 13% dip compared to Q3 2015, which is in-line with what we usually experience. On an annual basis, the number of offers rose by 17%.

Sales agreed M Inevitably we saw a drop off in sales activity in December,

however, the seasonal dip was not as significant as previous year’s, causing the number of agreed sales in Q4 2015 to grow 16% compared to Q4 2014.

Estate agency5

David Plumtree, Group Chief Executive (Estate Agency)

Number of applicants registered & new instructions (Indexed) Number of buyer offers (Indexed)

Number of buyer viewings (Indexed) Viewings per offer

Applicants registered per new instruction Number of sales agreed (Indexed)

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Applicants registered Number of instructions

0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of buyer viewings

020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of buyer offers

02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of sales agreed

5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Viewings, offers and sales M The number of viewings per offer fell steadily throughout Q4,

reaching a record low of 6.9 in December.

M Conversely, the number of offers per sale agreed climbed in the final quarter of 2015, rising 9% compared to the previous three months. However, the quarter’s total figure was 1% shy of what had been achieved in Q4 2014.

M On the whole the seasonal dips in activity have not been quite as significant as those that were experienced over previous festive periods – a sign of the strength of buyer demand at the moment.

Prices M The average house price grew month-on-month throughout Q4

2015. Ultimately, the quarter’s average value of £244,332 was up 2% on the average value in Q3 2015 (£240,485).

M Between Q4 2014 and Q4 2015 the average UK home value grew from £229,924 to £247,325 – a rise of 8%.

Estate agency

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020406080

100120140160180200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

2

4

6

8

10

12

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


02040

6080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5.05.56.06.57.0

7.58.08.59.0

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1.00

1.25

1.50

1.75

2.00

2.25

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£170,000£180,000£190,000£200,000£210,000£220,000£230,000£240,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Offers per sale agreed Average house price

7

Continued

During the course of 2015 the demand for land and new homes has remained strong and with the government keen to boost new housing supply it is likely that these buoyant conditions will remain in place for the foreseeable future. This has resulted in the growth of private new home NHBC registrations of 11% across the first nine months of 2015, a trend which we feel will continue moving forward. During the same period new homes registered for the public/affordable sector increased by just +2%.

Individual regions across the UK have had varying results in the same period with all, save for one, improving:

There are still many challenges facing the industry relating to land supply and the planning process, particularly the “time lag period” in terms of ability to promote sites and being able to implement a planning consent.

Promoting strategic and “five year supply” sites has reaped great reward albeit that many local planning authorities have still not effectively managed this within their systems, and are taking a defensive approach towards fulfilling their long term housing numbers objectives and obligations. As such demand for short term land and consented sites remains strong, and unless we see the supply of land move forward considerably, land values are likely to hold at their current levels.

The groups land operation improved its penetration and market share with land and professional consultancy revenues increasing by 20% when compared to the same period in 2014, and we have invested considerably in expanding the land and new homes teams in 2015, to improve the service and coverage we provide to the development industry.

Roger Barrett, Group Land Director

0

40

80

120

160

200

240

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

0

40

80

120

160

200

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

Average Weekly Instructions

Average Weekly Sales

Average weekly sales

0

40

80

120

160

200

240

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

0

40

80

120

160

200

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015



0

40

80

120

160

200

240

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

0

40

80

120

160

200

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015



0

40

80

120

160

200

240

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

0

40

80

120

160

200

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015



Average weekly instructions

0

40

80

120

160

200

240Ap

r

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

0

40

80

120

160

200

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015



0

40

80

120

160

200

240

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015

0

40

80

120

160

200

Apr

May Jun

Jul

Aug

Sep

Oct

Nov

Dec

2014 2015



• Eastern +23% • East & West Midlands + 11.5%

• South West + 15% • Yorkshire & the Humber -10%

• Scotland + 19% • North East & North West + 11.5%

• South East + 0.5%

New homes M Connells Group New Homes sales in the last quarter of 2015 were

45% up on the same period in 2014. Over the whole year Connells Group New Homes sales were 43% up on 2014.

M Factors which assisted this fantastic increase were:

● Connells Group have embraced Help To Buy The shortage of second hand properties has created more purchasers for New Homes.

● Connells Group were quick to realise the potential of ‘Permitted Development’ schemes and have been very successful in assisting developers to maximise sales.

● Promoting strategic and “five year supply” sites has reaped great reward albeit that the planning system still faces many challenges. Demand for consented land remains strong a pattern which is likely to continue.

● Connells Group sold over 8,000 New Homes in 2015, which we are confident is far more than any other Estate Agents in the country.

● Connells land operation improved its penetration and market share with land and professional consultancy revenues increasing by approaching 20% when compared to the same period in 2014.

M Connells Group have invested considerably in increasing their Land and New Homes teams in 2015, to improve the service and coverage we provide to the development industry in respect to bringing forward land and in the sale of new homes.

Permitted development M Recent changes to Permitted Development rules will provide

developers more opportunities to convert empty or unviable office buildings to residential.

M According to latest figures, over 6,000 conversions have already been given the go ahead and 850,000 sq.ft. of office space has been converted to residential. However, this has created a dire shortage of office space in some areas such as the City of London, and therefore these areas have been made exempt from further Permitted Development.

Government initiatives M The government have supported this strong market with a number

of initiatives:

● Putting pressure on Councils to improve the planning process.

● £2.3 billion to be spent on building 200,000 starter homes over the next five years at a discount of 20% for first time buyers.

● Extension of Help To Buy until 2020.

● Help To Buy ISA.

● Planning to build 13,000 new homes on public land.

● Plans to relax laws against building on ‘Green Belt’ land.

Land and new homes9

Roger Barrett, Group Land Director

As is normal, the rental market cooled in Q4 – driven largely by the slowdown in tenant activity over the Christmas period, as most tenants, like most home-movers, chose to keep their powder dry until the New Year, when their financial outlook will likely be clearer.

Aside from the seasonal slump, the drop in rents over the quarter – down from a record high in the final month of Q3 – will be cheered by tenants. It signals that landlords are responding to the laws of supply and demand and as tenant demand weakened rents fell. In addition some tenants are opting for two-year, rather than one-year or six-month, fixed term contracts offering the financial security of a long-term tenancy in exchange for paying lower monthly rents.

However, before tenants rejoice too much, it’s worth noting that average rents have increased sizeably since Q4 2014, reflecting the fact demand is still significantly outstripping supply in this sector overall. Tenants will likely be hoping the Government’s pledge to increase the supply of new homes on the market will start to bear fruits soon so that the drop in rents becomes more of a trend, but there is no sign of that yet.

Stephen Nation, Group Lettings Managing Director

the average number of tenancies agreed rose by

between

&

Q4 2014Q4 20154%

New applicants and instructions M The number of new instructions in Q4 2015 fell by 6%

compared to the previous quarter – driven largely by a sharp downturn in December. However, between Q4 2014 and Q4 2015, the number of new properties entering the lettings market rose by 9%.

M Q4 2015 also saw the number of new applicants fall sharply, contracting 27% on a quarterly basis and 2% in annual terms.

M The volume of applicants registered per new instruction fell sharply in the first two months of Q4 – dropping to a record low of 5.44 in November – before rallying somewhat in December. This led to a quarterly drop of 22% in the number of applicants registered per new instruction, while, on an annual basis, Q4’s figure represented a fall of 8%.

Regional rents M Rents across England in Q4 2015 continued to rise on an annual

basis, despite several regions experiencing quarterly price drops.

M Agreed rents in the London region rose by 6% on a 12- month basis from an average of £1,504 in Q4 2014 to £1,600 in Q4 2015. However, Q4’s average figure represents a dip of 5% on Q3 2015, when the average rent for the quarter stood at £1,680.

M In the Eastern & Central region, the average rent in Q4 was £742 – up by 4% compared to the same quarter in 2014. On a quarterly basis, rents in the region fell by 4%.

M The North experienced more modest changes in the average weekly rent, rising 3% between Q4 2014 and Q4 2015 – from a three-monthly average of £589 to one of £609 – while falling 1% on a quarterly basis.

M Agreed rents in the South grew, on an annual basis, by the highest proportion of any region – 10% – with the average rent across the quarter now standing at £863. In addition, between Q3 2015 and Q4 2015, rents in the region bucked the regional trend of dipping rents by rising by 3%.

M Over the long-term, rents have continued to rise, as the high demand for lettings accommodation has meant landlords don’t have to compromise on price. However, more recently, there are signs that the balance of power in the rental market may be shifting, as tenants become more cost aware.

M Demand for lets remains particularly strong in the South of England, where many renters – who work in London but cannot afford its high tenancy costs – opt to live, in order to gain easy access to the capital.

Residential lettings11

Stephen Nation, Group Lettings Managing Director

Applicants registered per new instruction

New applicants registered and new instructions (Indexed)

Average agreed rents (UK)

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

New instructions New applicants

5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Agreed Tenancies (Indexed)

£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000

North Eastern & Central South London

£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

Number of agreed tenancies (Indexed)

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

Average agreed rents

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880Ja

n-15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

Average agreed rents (London)

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

Agreed tenancies and average rents M The average number of agreed tenancies fell throughout the three

months of the final quarter of 2015, with December experiencing a particularly sharp contraction. This led to Q4’s overall figure representing a 22% drop on the previous quarter. Between Q4 2014 and Q4 2015, however, the average number of tenancies agreed rose by 4%.

M Average nationwide rents fell from £902 in September to £825 in October – before stabilising throughout the remainder of Q4. The steep fall between September and October caused the average rent in Q4 to drop 5% on Q3 2015.

M However, Q4 2015’s average rent of £826 represents an increase of 4% on the typical rent twelve months previously, when the figure stood at £792.

Residential lettings

Average agreed rents (North)

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

Average agreed rents (Eastern & Central)

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

Average agreed rents (South)

02550

75100125150

175200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


5

6

7

8

9

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

60

80

100

120

140

160

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£700£725£750£775£800£825£850£875£900£925

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£450

£475£500£525£550£575£600£625

£650

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£550

£600

£650

£700

£750

£800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£1,300£1,350£1,400£1,450£1,500£1,550£1,600£1,650£1,700£1,750£1,800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£600

£640

£680

£720

£760

£800

£840

£880

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

£0

£500

£1,000

£1,500

£2,000


£1,600

£863£742

£609

£1,680

£841£776£614

Q3 2015 Q4 2015

13

Continued

The traditional December slow-down in the property market was less marked than previous years and showed good year on year growth. In addition it has not halted rising mortgage values, which continued to inch up throughout the final quarter of 2015. This is due to a combination of rising property prices, growing real-term wages and increasing confidence on the part of lenders.

The buy-to-let market has enjoyed a strong year overall. The continuing low interest rates, alongside a rental market where demand still outweighs supply, has tempted many investors in 2015 to take the plunge and become property investors. There are currently no signs that the government’s recent moves to tax the buy-to-let industry more heavily – by, for example, scaling back the landlord “wear-and-tear” allowance and increasing Stamp Duty, has yet taken any of the fizz out of the sector. Relatively strong BTL purchase business in December reflected the increased activity in the market to ‘beat’ the Stamp Duty deadline.

The residential mortgage market has contracted significantly in the final quarter of the year, as home-buyers and remortgagors have resisted making any big financial decisions until the festive season is behind them. However, the market has enjoyed healthy growth on a 12-month basis. The first-time buyer sector (typically a more cautious corner of the market) has made some particularly pleasing progress, as those taking their first step on the ladder become more financially confident and savvy when it comes to finding, and securing, a home that’s right for them.

Adrian Scott, Group Mortgage Services Director

the first time buyer market experienced an

annual growth of 23%

Residential M Despite experiencing a significant quarterly dip, the mortgage

market in Q4 2015 continues to grow on a 12-month basis.

M Home-mover mortgage activity in Q4 saw the biggest seasonal dip, dropping 22% compared to the previous quarter, while growing by 9% on an annual basis.

M Similarly, the first-time buyer market contracted by 8% between Q3 2015 and Q4 2015, but experienced annual growth of 23%.

M On a quarterly basis, the remortgaging market fell by 11% in Q4. However, the sector also enjoyed the greatest annual uptick – of 48%.

Buy to let M The buy-to-let mortgage market followed a similar pattern to that

of the residential mortgage market – experiencing strong growth on an annual basis, alongside small quarterly dips.

M Between Q4 2014 and Q4 2015, the number of buy-to-let purchases grew by 29%, but fell back by 2% on a quarterly basis.

M Similarly, the number of buy-to-let remortgages grew by 48% over a 12-month period, while contracting by 11% between Q3 2015 and Q4 2015.

Mortgages15

Adrian Scott, Group Mortgage Services Director

0

50

100

150

200

250

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of First-Time Buyers Number of HomemoversNumber of Residential Re-Mortgages

£95,000£100,000£105,000£110,000£115,000£120,000£125,000£130,000£135,000£140,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of BTL Remortgages Number of BTL Purchases

1%24%

11%

11% 25%

28% FTBHome MoverBTL RemortgagesBTL PurchasesRemortgagesOther

2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


20

21

22

23

24

25

26

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of BTL mortgages by type (Indexed)

0

50

100

150

200

250

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£95,000£100,000£105,000£110,000£115,000£120,000£125,000£130,000£135,000£140,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


20

21

22

23

24

25

26

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of residential mortgages by type (Indexed)

0

50

100

150

200

250

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£95,000£100,000£105,000£110,000£115,000£120,000£125,000£130,000£135,000£140,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


20

21

22

23

24

25

26

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Average mortgage value

0

50

100

150

200

250

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£95,000£100,000£105,000£110,000£115,000£120,000£125,000£130,000£135,000£140,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

020

406080

100

120140160

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


20

21

22

23

24

25

26

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Average mortgage term (Years)

Mortgage values M The average mortgage value in the final quarter of 2015

continues to grow on a quarterly and annual basis. Between Q4 2014 and Q4 2015 the average size of a mortgage grew from £128,044 to £138,502 – an increase of 8%. The average mortgage value also grew by 1% compared to the previous quarter, when it stood at £137,603.

Mortgage terms M Typical mortgage terms have fluctuated somewhat over

Q4, but the general trend represented a slight increase in the average term length. On a yearly basis, the average mortgage length has crept up by two months, and has increased by one month on a quarterly basis.

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

Mortgage type split UK Q4 2015

FTB Home Mover BTL Remortgages BTL Purchases Remortgages Other

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

Mortgage type splitUK Q3 2015

1%2%

UK mortgage type split M The first-time buyer sector continued to account for the

largest proportion of housing market activity in the final quarter of the year. While other sectors have quietened down in Q4, first-time buyers are perhaps more eager than most to take advantage of the festive lull in order to capture an end-of-year deal and climb the first rung of the property ladder. They were also likely to have their spirits lifted by an Autumn Statement that heralded the continuation of schemes designed to support them, such as Help to Buy. Homemovers fell away significantly in Q4, compared to both Q3 and Q4 2014. Meanwhile, the buy-to-let sector continues to make up a sizeable percentage of Q4’s property market activity, with a strong December month for purchasers.

Regional picture M First-time buyer activity in Q4 2015 was strongest in

the South West (30%) and weakest in London (26%), while home-mover activity was most pronounced in the North (25%) and most muted in London (20%). The North also saw the largest amount of activity by those looking to remortgage (24%), while the Midlands possessed the quietest remortgaging sector (19%) in Q4. London and the South East were leading the buy-to-let boom, with the capital boasting the highest proportion of buy-to-let remortgages (19%) and the South East accounting for the highest number of buy-to-let purchases (17%). The buy-to-let purchase market was weakest in the North (11%), while South West was the region where the buy-to-let remortgaging market was least pronounced (10.5%).

Mortgage type splitQ4 2015

South East

Midlands London

Wales/South West

EasternScotland/North

Mortgages17

Continued

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

1%24%

11%

11% 25%


2%19%

15%

14%23%


1%21%

13%

10% 25%


1%20%

17%

12% 21%


2%21%

12%

19%20%


1%20%

15%

12% 24%


1%

21%

13%

11% 27%


2%

21%

14%

12% 23%


North Q4 2015

Midlands Q4 2015

South West Q4 2015

South East Q4 2015

London Q4 2015

Eastern Q4 2015

UK Q4 2015

UK Q4 2015

FTB Home Mover BTL Remortgages BTL Purchases Remortgages Other

1%

1% 1%

2% 2%

1%

increase in the number of first time

and mortgage buyers inQ4

At the time of writing the total repossession numbers have yet to be published, however it is expected that the final total for 2015 will be in the region of 10,500 properties, the lowest since 2004.

After several years of falling figures, we are likely to see a rise in repossessions and arrears in 2016. Arrears over 2.5% of the original mortgage balance fell to a low of 102,000 in 2015, but the forecast is they will increase to 105,000 in 2016 and 115,000 in 2017.

It is anticipated that repossessions will increase sharply to 18,000 in 2016 and 19,000 in 2017. In addition to increased arrears, the main factor for this predicted increase is the resolution of the legal challenge some lenders faced in 2015 which resulted in lower than expected levels of possession proceedings.

Buy-to-let purchases have remained the same and it will be interesting to see what effect the Government’s changes to stamp duty and buy-to-let taxation will having in the coming months.

Simon Matthews, Managing Director of AMG

we have seen a slight

New instructions M The proportion of new instructions accounted for by houses

decreased from 73% in Q3 2015 to 70% in Q4 2015.

M Similarly, the proportion of new instructions accounted for by bungalows fell by 1% between Q3 2015 and Q4 2015 and now stands at 7%.

M As houses and bungalows have accounted for a smaller share of the new instructions market, apartments have become more proportionally significant. The proportion of the market made up for by flats rising from 19% in Q3 to 23% in Q4.

Purchase type M The majority of distressed completions – 38% – in Q4 2015

were accounted for by cash purchases, representing a 3% dip on the previous quarter.

M Those with nothing to sell made up the second-largest proportion of completed sales in the quarter – at 22%, which again represents no change on the previous quarter.

M Cash remains the most common way of purchasing repossessed properties, with investor’s still favouring residential property as a good investment. We have seen a slight increase in the number of first time and mortgage buyers in Q4, which could be a reflection of the availability of competitive mortgage products.

19

Asset management Simon Matthews, Managing Director of AMG

8%

18%

73%

Mortgage/Remortgage Valuation/HouseHomebuyer/Condition Report/FlatBTL Mortgage Valuation/BungalowRepossession Valuation/ApartmentBuilding Survey/LandOther

7%

23%

70%


16%

9%

22%12%

41%Mortgage/Remortgage Valuation/HouseHomebuyer/Condition Report/FlatBTL Mortgage Valuation/BungalowRepossession Valuation/ApartmentBuilding Survey/LandOther

18%

8%

22%14%


100%

Mortgage/Remortgage ValuationHomebuyer/Condition ReportBTL Mortgage ValuationRepossession ValuationBuilding SurveyOther

100%


New Instructions by Property Type Q2 2015


Completions by Purchase Type Q3 2015


Survey type split Q4 2014


Completions by purchaser type (Q3 2015)

8%

18%

73%


7%

23%

70%


16%

9%

22%12%


18%

8%

22%14%


100%


100%








Completions by purchaser type (Q4 2015)

Cash FTB Nothing to sell BTL Chain

Table 1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

25900 40000 48900 38500 37300 33900 28900 20900 10500 18000 19000

18000 19000

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000220,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

0

10,000

20,000

30,000

40,000

50,000

2013 2007 2008 2009 2010 2011 2012 2014 2015 2016 2017

Table 1-1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

127800 182600 199600 175800 161400 157900 144600 116800 102000 105000 115000

105000 115000

0

30,000

60,000

90,000

120,000

150,000

180,000

210,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Possessions in PeriodArrears

Arrears - 2.5% or more of balance at end of period Posessions in period

Despite the final quarter of the year being a historically slow month for the survey and valuation market, the underlying strength of the sector still manages to shine through. Over the last 12-months, mortgage valuation activity has grown strongly, driven in part by investors, home owners and first-time buyers all eager to take advantage of rock-bottom mortgage rates and by the positive economic climate spurring confidence in the property market.

The buy-to-let market continued to flourish in Q4, albeit at a slower pace than in previous quarters. While some of this cooling can be attributed to the general Christmas slowdown, the pressure on the buy-to-let market from a series of Government measures designed to tax and regulate it more heavily may also be beginning to bite. However, the long-term growth figures indicate that the buy-to-let market is robust enough to weather a bit of top-down Treasury tampering in the market, even if some investors are ultimately put off by the additional financial planning required by the recent changes. Moreover, with the 1st April 2016 Stamp Duty hike, many investors may feel they have little choice but to brave the new regulations before it becomes more expensive to expand their portfolios – and this could account for the fact the sector has not seen quite the same downturn as elsewhere in the property market.

Looking ahead at 2016, we are seeing stronger momentum being carried forward into Q1 than in 2015, and if the £237bn lending levels forecast by the CML materialise, the survey and valuation sector is set to be very busy this year with lenders, house builders and others needing to rely even further on quality and surety of valuation service delivery.

Ross Bowen, Managing Director, Connells Survey & Valuation

Mortgage valuations M The number of mortgage valuations in Q4 held fairly steady

throughout October and November, before falling sharply in December. This meant that, overall, Q4’s figure was down by 4% compared to the previous quarter. However, of more significance is that the mortgage valuation activity conducted in Q4 also represents a 7% rise on the same quarter last year.

M The number of repossession valuations rose by 1% between Q3 2015 and Q4 2015. However, the overall trend in repossession valuation activity is still one of decline, with activity in the quarter falling 63% over a 12-month basis.

M As expected mortgage market activity has been dampened this quarter by the festive season. However, there is still a long-term trend of growth in the sector as borrowers from across the market look to take advantage of competitive rates.

Surveys M The number of surveys carried out in Q4 decreased 8% on a

quarterly basis, however looking and the overall annual change, activity is up 8%.

Buy to let M The buy-to-let valuations sector has somewhat bucked the

festive slowdown trend, with valuation activity in the sector growing by 1% on Q3 2015.

M In addition, between Q4 2014 and Q4 2015, the buy-to-let sector grew by almost two-thirds (65%).

Average valuation M After falling throughout Q3, the average valuation price rose for

the three consecutive months of the final quarter of the year. This led to the average three-monthly price rising by 4% on a quarterly basis from £233,865 to £244,020.

M Between Q4 2014 and Q4 2015, the average valuation price also rose by 4%.

Survey and valuation21

Ross Bowen, Managing Director, Connells Survey & Valuation

Number of surveys (Indexed)

Number of BTL valuations (Indexed)

0

50

100

150

200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Surveys

0

45

90

135

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Mortgage Valuations

0

200

400

600

800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of BTL Valuations

£200,000£205,000£210,000£215,000£220,000£225,000£230,000£235,000£240,000£245,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1%1%

1%

12%

11%

74%


1%1%

1%

12%

11%

75%


0

50

100

150

200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Surveys

0

45

90

135

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

150

300

450

600

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£200,000£205,000£210,000£215,000£220,000£225,000£230,000£235,000£240,000£245,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of mortgage valuations (Indexed)

0

50

100

150

200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Surveys

0

45

90

135

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

200

400

600

800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£200,000£205,000£210,000£215,000£220,000£225,000£230,000£235,000£240,000£245,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1%1%

1%

12%

11%

74%


1%1%

1%

12%

11%

75%


0

50

100

150

200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Surveys

0

45

90

135

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

150

300

450

600

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£200,000£205,000£210,000£215,000£220,000£225,000£230,000£235,000£240,000£245,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

0

50

100

150

200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Surveys

0

45

90

135

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

200

400

600

800

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£200,000£205,000£210,000£215,000£220,000£225,000£230,000£235,000£240,000£245,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

1%1%

1%

12%

11%

74%


1%1%

1%

12%

11%

75%


0

50

100

150

200

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Number of Surveys

0

45

90

135

180

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


0

150

300

450

600

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15


£200,000£205,000£210,000£215,000£220,000£225,000£230,000£235,000£240,000£245,000£250,000

Jan-

15

Feb-

15

Mar

-15

Apr-1

5

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec

-15

Survey type splitUK Q4 2015

Survey type splitUK Q4 2014

Mortgage/Remortgage Valuation/House Homebuyer/Condition Report/Flat BTL Mortgage Valuation/Bungalow Repossession Valuation/Apartment Building Survey Other

2%0.75%0.25%

16%

11%

70%


1.25%0.75%0.5%

17%

10.5%

70%


Survey Type Split Q2 2015


2%0.75%0.25%

16%

11%

70%


1.25%0.75%0.5%

17%

10.5%

70%




0.25% 0.75% 2%

Survey and valuation report types M The survey type split in Q4 has remained consistent on a quarterly and

yearly basis, with mortgage and remortgage surveys accounting for the vast majority of reports carried out.

M Mortgage valuations accounted for 70% of the survey market in Q4 2015 – a figure which represents no change on the previous quarter but falling from 74% in Q4 2014.

M Conversely, the proportion of surveys for buy-to-let valuations increased on an annual basis, rising from 12% of mortgage market activity in Q4 2014 to 17% in Q4 2015. This figure also represents an increase of 6% on the previous quarter.

M The proportion of the market accounted for by Home Buyer Reports remained static, accounting for 11% of the market in Q4 2015 – the same proportion as in Q3 2015 and Q4 2014.

M Repossession valuations in Q4 2015 made up the smallest proportion of the survey market, accounting for only 0.25% – down from 0.5% in Q3 2015 and 1.25% in Q4 2014.

0.5% 0.75% 1.25%

Average house prices, mortgage values and rents: Q4 2015

Average house price Q4 2015

£244,332

up 6% from Q4 2014 (£229,567)

from Q3 2015 (£240,485) 2%

up 1% from Q3 2015 (£137,603)

from Q4 2014 (£128,044) 8%Up

Up

Average rent (North)

£609Average rent (East & Central)

£742Average rent (London)

£1,600Average rent (South)

£863

£138,502Average mortgage value Q4 2015

23

Economic outlook

The UK economy continued to perform strongly in the final quarter of 2015, as GDP growth remained healthy and consumer confidence has retained the buoyancy of previous quarters. However, this strength may not have manifested itself very prominently in the property market this quarter, as buyers at all stages of the property market turned their thoughts – and their spending power – towards the festive season. As 2016 commences, and would-be house-hunters refocus their attention on the property market, expect the UK’s positive economic position to make itself felt more directly in housing activity.

While the rental property market avoided a prospective Labour government’s rent control policies after the party’s defeat in the May 2015 General Election, it has been faced with a separate set of challenges from the newly-elected Conservative government. The incoming government has sought to claw back money from the buy-to-let market by, firstly, stripping landlords of some of their special privileges such as the wear-and-tear allowance and, secondly, by introducing new taxes on the market in London, where it is most profitable. The first quarter of 2016 may see the Government take more action to get a slice of what it clearly sees as highly profitable but barely regulated sector. Despite this, landlords may also rush to expand their portfolio in the first quarter of 2016, to avoid being hit by the Stamp Duty rise that kicks in on 1st April.

The Bank of England has also kept its Base Rate at a rock-bottom low of 0.5% for yet another quarter, which has no doubt continued to fuel activity in the mortgage market. However, now that the US Federal Reserve has raised its base rate – albeit slightly – for the first time in years, the Bank of England is widely expected to follow suit sometime in 2016. It’s difficult to predict how the mortgage market will react to any rate rise, but expect a flurry of activity from the property market at the beginning of 2016 before the Bank of England’s Monetary Policy Committee reviews its base rate, as investors, first-time buyers and home movers all rush to avoid a potential rate rise.

Methodology

Connells Group analyses detailed data from its estate agency, lettings, mortgage, survey and valuation and asset management businesses from between 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.

25

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 540 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, Peter Alan and Gascoigne Halman. Our branches cover most of the UK so whether you need estate agency services in Scotland or on the South-East coast, we can help.

Corporate clients benefit from Connells’ broad range of award-winning services and depth of experience and expertise.

No surprise then that 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

About us

Our estate agency brands

Our business brands…

connellsgroup.co.uk

@connellsgroup

Contacts

Estate AgencyFor more information, please contact David Plumtree, Group Chief Executive (Estate Agency) on 01525 218669 or email [email protected]

Land & New Homes For more information, please contact Roger Barrett, Group Land Director on 01604 622444 or email [email protected]

Residential Lettings For more information, please contact Stephen Nation, Group Lettings Managing Director on 01525 218669 or email [email protected]

Mortgages For more information, please contact Karen Faulkner, Mortgage Services Development Manager on 01525 218669 or email [email protected]

Asset Management For more information, please contact Simon Matthews, Managing Director of AMG on 01483 456231 or email [email protected]

Survey & Valuation For more information, please contact Ross Bowen, Managing Director of Connells Survey & Valuation on 01525 218630 or email [email protected]

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