The UK housing market gathered further steam in August with buyers seeking properties with gardens following months of lockdown restrictions.
But the latest monthly gauge of prices from the Royal Institution of Chartered Surveyors (RICS) also sent a warning that the recovery could run out of steam, with expectations for sales in the coming 12 months deteriorating amid worries about the economy. It remains uncertain whether the current mini-boom is simply the release of pent-up demand, helped by a temporary cut to property taxes.
The RICS monitor shot up to +44 in August from +13 in July, well outstripping expectations for a reading in the region of +25. Prices rose across the UK except in London, where they have remained more or less flat for the past two months.
As part of measures to support economic activity after the Government’s key furlough programme ends in October, Chancellor Rishi Sunak in July announced a temporary emergency tax cut for buyers.
More than 80 per cent of estate agents surveyed said they expect higher demand for properties with gardens, and most predicted reduced demand for homes in highly urban areas or tower blocks.
“The latest RICS survey provides firm evidence of a strong uplift in activity in the housing market which should help support the wider economy gain traction over the coming months,” RICS chief economist Simon Rubinsohn said.
Caledonia Housing Association has said it is on target to deliver 500 new homes, the majority for social rent, by the middle of 2022.
Formed in 2011 by the merger of the Servite and Perthshire housing associations, Caledonia has committed £75 million on projects spanning 16 different sites. A total of £40m is confirmed for seven current projects stretching from Inverness through Tayside and into West Dunbartonshire. A further £35m has been earmarked for another nine sites where land has already been purchased, or negotiations are ongoing.
A total of 271 homes are currently under construction, with the first at Monarch’s Rise in Arbroath due to be handed over to Caledonia this autumn.
“Like other developers, our plans for 2020 were interrupted by the pandemic but it is now full steam ahead,” said Andrew Kilpatrick, development director at Caledonia Housing Association.
“We are much encouraged by the speed of the upturn. Everyone we are working with – local authorities, private housebuilders and sub-contractors – is doing their utmost to help and we hope that the construction of these new affordable homes and resultant creation of jobs will help kick-start Scotland’s economic recovery as quickly as possible.”
The UK’s fourth-largest supermarket group, Morrisons, has reported a 25% fall in first half profits after spending £155m on measures to deal with the Covid-19 pandemic.
During the six months to August 2, the group made a pre-tax profit of £148m. That was ahead of analysts’ forecasts, but below the £198m it made in the same period a year earlier.
Like all the major supermarket groups, Morrisons has seen sales soar during the pandemic. However, the flip side has been additional costs related to ensuring the safety of staff and customers in stores, and the rapid expansion of home delivery services.
Excluding fuel, like-for-like sales were up 12.3% in the second quarter, having increased by 5.7% in the first three months of the financial year.