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ECONOMY
Wages rose 3.6% in the three months to May, the highest rate of growth since 2008 according to new figures
released by the Office for National Statistics. Wage growth continues to outstrip inflation, inflation in May 2.0%,
down from 2.1% in April.
After contracting in April, the UK economy rebounded by 0.3% in May, according to the ONS, boosted by some
recovery in car production. Meanwhile, the service sector continues to contract as it has done since summer
2018.
UK employment remains at its highest level since 1971. The ONS report 32.75 million people aged 16-64 were
in employment in the three months to the end of May. The number of self-employed part-timers has increased
to over 1.5 million, more than double 25 years ago.
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TRANSACTIONS
In June, the HMRC report that the number of properties sold was 16.5% lower than a year earlier. Despite
this fall, in the first half of 2019, sales levels were just 3.6% below the first half of 2018.
Nationally there were 7.8% fewer homes for sale in June compared to a year ago, according to Rightmove,
with sales volumes 4.6% lower to date in 2019.
With demand levels starting to stabilise, the RICS expect some improvement in sales rates at the national
level over the next 12 months.
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PRICES
Property prices remained virtually static in May, the average price of a property £229,431, up just 0.1% on
April. Year-on-year prices have risen by 1.2%
The average asking price of a newly listed property fell by 0.2% in June, the first fall of 2019 according to
Rightmove. They anticipate that the rest of 2019 will be a buyers market, with stock levels per agent at
their highest level since July 2015.
26% of sales in May were to first time buyers, according to the NAEA. This is slightly below the April figure
of 27% but up from 24% in May last year.
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DEMAND
The latest RICS Residential Market Survey suggests the market is beginning to stabilise. Demand levels
were largely unchanged in May, compared to April, following consecutive months of decline since July 2018.
The Bank of England report mortgage approvals and mortgage lending in May were up marginally on last
year, however quarter on quarter the volume and value of lending has fallen.
Although buyer interest remains, at 62 days the average time to find a buyer in July is at its longest since
July 2013, according to Rightmove.
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DEVELOPMENT/NEW BUILD
The government has announced plans to abolish the selling of new houses in England as leasehold and to
reduce ground rents for new leases to zero in a bid to tackle the continuation of unfair leasehold practices.
New permitted development rules will allow homeowners to build a single storey extension of up to 6 m
for terraced and semi-detached properties and 8 m for detached properties. Neighbours will still need to
be consulted on plans.
A new national “progressive property tax“ has been suggested by the Labour party in its new “Housing for
the many report“. The tax would replace SDLT and be an annual levy based on regularly updated property
values. Rates would be set nationally, with second homes and empty properties attracting higher rates.
Discounts for single occupancy of larger premises would also be removed.
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PRIME MARKET
The latest data from Forbes shows that globally there are now 2,153 billionaires and that the UK’s share of
them has remained consistent at 2.8% over the last few years despite Brexit. This is reassuring for the prime
residential markets, particularly those in central London, which are influenced by trends in global wealth
creation.
The average price in Kensington & Chelsea is now £1.2 million with the majority of sales in the last year cash
purchases (53% cash purchases and the remaining 47% mortgaged purchases).
London has been named the top city for foreign direct investment from overseas tech companies. The London
and Partners report the capital attracted 91 tech investment projects with a value of £864 million in 2018,
significantly more than Singapore (79), Paris (46) and New York (32).