Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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February 14, 2024

VTY | Economy – Inflation holds steady; House prices decline further, ONS

Company news

Vistry Group (VTY,  950p, £ 3,371m mkt cap)

Formed from the mergers of Bovis Homes and housebuilding and partnerships divisions of Galliford Try (GFRD) and Countryside Partnerships. Contract. Countryside Partnerships has entered into a new framework agreement with Sigma Capital Group to deliver 5,000 new homes for Sigma’s build-to-rent (BTR) brand, Simple Life Homes. Sigma is the leading provider in the Build-to-Rent market focused on single-family housing and Countryside has been a framework partner on Sigma’s BTR delivery programme since 2014. “It supports both organisations’ ambitions for growth by clearly mapping out their expansion plans within a set framework and timeframe”. The 5,000 new homes will be delivered to Sigma across a number of UK regions over the next five years, and will complement Vistry’s Partnerships model of delivering mixed tenure housing.

Economic data

Inflation. Consumer price inflation was unchanged in January, at 4.0% Y/Y, slightly improved on consensus expectations of a rise to 4.1%, according to this morning’s ONS inflation release. On a monthly basis, CPI fell by 0.6% in January 2024, the same rate as in January 2023 (below, left). The largest upward contribution to the monthly change came principally from higher gas and electricity charges, while the largest downward contribution came from furniture and household goods, and food and non-alcoholic beverages. Core CPI (excluding energy, food, alcohol and tobacco and a key measure in BoE rate setting decisions) rose by 5.1% in the 12 months to January, the same rate as in December. Next release, 20 March.

House prices. According to the ONS, average UK house prices decreased by 1.4% Y/Y to £285k in December (provisional estimate), up from a decrease of 2.3% (revised from -2.1%, below) in the 12 months to November 2023. On a M/M basis, prices rose by just over 0.1%. Average prices fell 2.1% Y/Y in England to £302k; Wales -2.5%, £214k; increased by 3.3% in Scotland, £190k; Northern Ireland, +1.4%, £178k in the year to Quarter 4. Within England, the North West had the highest annual percentage change in the 12 months to December 2023 (1.2%), while London saw the lowest (negative 4.8%).

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