MARKET COMMENTARY
I write market commentary on behalf of quite a few of my clients, who find it’s a great way of keeping in regular contact with their customers. I really enjoy the facts and figures side of the business but find it’s best to avoid bombarding readers with too much data and I try to keep my language as jargon-free as possible. Facts and figures are important, of course they are, but you need to use them sparingly if you want to hold people’s attention. After all, you need to engage as well as inform. Tone is important, too. It varies between clients and sectors and I make sure my copy always reflects their different personalities.
Below is some sample text from a newsletter I write for the mortgage industry, which gets a whopping 50% open rate from a big database.
SAMPLE ARTICLE FROM A PROPERTY EZINE: DEC 23
Despite the many headwinds the property market has faced in 2023, it has held up well. Prices and activity levels have fallen but not nearly as much as expected. Now, with inflation slowing, mortgage costs coming down sooner than expected and wages rising, it is beginning to show signs of recovering.
Nationwide’s index rose for the third month in a row in November, with house prices up 0.2%, following a 0.9% rise in October. Halifax’s index was up for the second month in a row, with prices up 0.5% and by an even more impressive 1.2% the previous month. Activity levels are improving, too. In October, agreed sales were 15% below their pre-pandemic levels (2019) but, by November, that figure had risen to 10%. The number of mortgage approvals and valuations is also increasing. And, after a prolonged period of stock shortages, the number of homes for sale is just 1% behind its usual levels (Rightmove, 2019), providing buyers with considerably more choice than there was during the pandemic.
Kim Kinnaird, Director, Halifax Mortgages, says:
”Recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers. With mortgage rates starting to ease slightly, this may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases.”
However, the improving outlook does not mean we are about to enter into boom conditions. The market is still operating in favour of buyers rather than sellers and, according to Rightmove, asking prices dipped last month as sellers tried to tempt buyers into making an offer before Christmas. It was slightly more than the usual seasonal fall, which Rightmove claims is the result of sellers’ more realistic attitudes to pricing.
Nor is the recovery evenly spread, with smaller properties faring far better than larger ones. The number of sales agreed for studio, one and two-bed properties is just 7% behind 2019’s levels. Four and five-bed homes, in contrast, are 14% behind. There were also some quite wide regional variations - in November, asking prices were down by as much as 3% in the Southeast, by 2.3% in Yorks and Humber and by 2.1% in London. In the West Midlands and the North West, they were down by only 0.5%.
HOUSE PRICES AND STATISTICS
All the most up-to-date indices’ annual house price figures are now showing signs of improvement, with the falls from their frothy 2022 peak reducing month-by-month.
Nationwide: Nov: Avge. price £258,557. Monthly change +0.2%. Annual change -2.0%
Halifax: Nov. Avge. price £283,615. Monthly change +0.5%. Annual change -1.0%
Land Registry: Sept: Avge. £291,000. Monthly change -0.5%. Annual change -0.1%
Zoopla: Oct: Avge. price £261,100. Annual change -1.2%
Rightmove: Nov: Avge. price £362,143. Monthly change -1.7%. Annual change -1.3% (asking prices on Rightmove)
BUY-TO-LET
Homelet’s Rental Index shows, for the first time in a long while, that rents came down in almost all the regions last month. The average rent across the UK fell by 0.3% to £1,279pcm and, in the capital, rents were down 0.8% to £2,174pcm. The run-up to Christmas is traditionally one of the quieter times of the year for lettings and with the disparity between supply and demand still at record levels, it is unlikely to mark the start of a new trend.
Despite the fall, rents have risen so high that they are currently absorbing 33.2% of the average tenant’s gross income and, at some point, they are likely to reach their limit of affordability. There is probably still a little more room for manoeuvre, though, as in London, for example, rent is already taking up as much as 39.3% of tenants’ incomes.
In some more welcome news for the sector, the cost of buy-to-let mortgages is now finally starting to fall, after it had been lagging some way behind the rates available to owner-occupiers. This will not only ease the pressure on landlords’ finances but also points to better times ahead and should encourage landlords to remain in the sector rather than selling up.