Filtered by Subscriptions: UK Housing Use setting UK Housing
The latest lockdown will keep rental demand in London very weak and prolong the drop in rents there. There is no doubt that they will recover in the summer if vaccines are successful and the virus restrictions are eased, but we think that some of the …
13th January 2021
Government reform of leasehold will reduce payments from leaseholders to freehold landlords a lot in some instances. In this Update, we provide two examples of how the changes will affect “enfranchisement premia” – the cost of buying the freehold or …
11th January 2021
The year the housing market ignored the economy 2020 may well have been the strangest year for the housing market since the Halifax house price index began in 1983. Despite the biggest drop in GDP since 1709, house prices rose by 7% y/y in Q4, the largest …
8th January 2021
Construction continues to recover…for now The seventh consecutive construction PMI reading of over 50 in December mainly reflected a continued strong recovery in housing activity. The rebound in construction of commercial property has already all but …
7th January 2021
The government’s plan to end the furlough scheme and the stamp duty holiday in the spring sets the housing market up for a hangover from the surge in prices in 2020. As a result, we are more downbeat on the prospects for house prices in 2021 than most …
5th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
Surge in lending to pre-financial crisis levels will be fleeting The increase in mortgage approvals for house purchase to over 100,000 for the first time since August 2007 underlines the remarkable strength of housing market activity. If moving house …
4th January 2021
After falling in May and June, house prices shrugged off the collapse in GDP and the decline in employment to surge in the second half of the year. (See Chart 1.) As a result, annual house price growth in Q4 is on track to be just over 6%, the strongest …
18th December 2020
Given a tightening in credit conditions, the Financial Policy Committee (FPC) is probably right to be unconcerned by the recent surge in mortgage lending. In fact, the Committee is preparing to loosen its mortgage lending guardrails, which may allow …
14th December 2020
Surveyors report that activity peaked in November After mortgage approvals hit a 13-year high in October, surveyors reported that sales rose yet further in November to what they expect to be the high-water mark. With the outlook for employment shaky and …
10th December 2020
The increase in working from home that appears to have led buyers to put less emphasis on location and more on space has not undermined London house prices. As of September, house price growth in the capital of 4.1% y/y was only marginally below that in …
9th December 2020
Surge in mortgage advances comes despite reduction in riskier lending The surge in mortgage lending to its highest level since before the financial crisis has come despite banks curbing riskier loans. If we are right to think that house prices will dip, …
8th December 2020
House prices continue to rise strongly, but for how much longer? There was no sign whatsoever of the surge in house prices abating in November as annual growth in the Halifax index rose to a fresh four-year high. Tight market dynamics suggest that prices …
7th December 2020
No double dip in construction The rise in the headline construction PMI in November showed that the industry continued to recover even as overall economic activity probably contracted again. But builders’ optimism that this will continue for the …
4th December 2020
News about a vaccine has boosted financial markets and we have revised up our global economic expectations for the next two years or so. But while we think that this bodes well for the medium term, next year is still likely to be tough for most property …
2nd December 2020
Surge in house prices to reverse in 2021 Despite GDP being set for its biggest fall in 300 years this year, annual house price growth accelerated to its highest rate since January 2015 in November. The divergence has only been possible due to …
1st December 2020
Approvals stay high despite evidence of a cut back in high LTV lending Very strong demand allowed mortgage approvals to surge yet higher in October even as banks cut back on high LTV lending. Approvals are likely to rise even further in the run up to end …
30th November 2020
The negative economic impacts of COVID-19 have bypassed the housing market so far due to the extraordinary support measures put in place by the government, regulators, and banks. But while policy has probably reduced and delayed the impact of COVID-19 on …
27th November 2020
With the benefit of hindsight, the stamp duty holiday was not necessary to get the housing market moving again. And the end of the holiday in March will insert a cliff edge in demand at the exact moment we expect employment and incomes to be suffering …
20th November 2020
A striking development in the past few months is how well housing markets in developed markets have generally been doing. We expect this to peter out next year, although in most cases house price falls will be avoided. In the meantime, the strength of …
19th November 2020
Virus-driven behaviour changes that support a faster online transition will boost industrial demand over the coming years. But we don’t believe the view that higher online spending will cause rents to detach permanently from the underlying strength of the …
History suggests that large falls in employment can lead to big falls in house prices. The furlough scheme, mortgage holidays, and a moratorium on possessions have insulated the housing market from the effects of this crisis so far. But after that support …
17th November 2020
Housing market boom continuing for now The housing market remains exceedingly buoyant, with both the number of sales and house prices rising further in October. But like us, surveyors are increasingly doubtful that the price gains and activity witnessed …
12th November 2020
Housing market activity is booming as pent up demand from the first lockdown is expended and buyers rush to take advantage of the stamp duty cut. There are some tentative signs, though, that the surge in house prices over the summer is starting to …
11th November 2020
Cladding issues are a downside risk to our already weak housing transactions forecasts for next year. If there continues to be severe testing delays and no change in policy, transactions could end up significantly weaker than our expectations in 2021. …
9th November 2020
2020 surge in prices starts to ease The smallest monthly increase in house prices since June shows that the surge in house prices was losing steam even before the second lockdown was announced. With the economic outlook deteriorating and policy support …
6th November 2020
Recovery in construction waning The fall in the headline construction PMI to its lowest level since May shows that the recovery in activity was waning even before the second lockdown began. Admittedly, construction sites will remain open this time around. …
5th November 2020
The second lockdown will have a smaller immediate impact than the first as the housing market is allowed to remain open this time. But it will also put the economic recovery into reverse and push the unemployment rate up to 9% next year. With policy …
4th November 2020
House price growth surges to five-year high House prices rose at their fastest rate in five years during October. But the housing market is mainly being driven by temporary factors such as pent-up demand and the stamp duty cut. Looking ahead, we think …
30th October 2020
House purchase lending reaches new peak September’s lending data show another increase in house purchase approvals. But looking ahead, with the economy looking increasingly fragile, lending is likely to fall back once the pent-up demand from earlier this …
29th October 2020
Overview – The post-lockdown recovery in house price growth and housing market activity has exceeded expectations. But the economy will act as a drag on the housing market in the coming months, while pent-up demand will soon be expended and the stamp duty …
27th October 2020
Banks maintain property lending caution Mortgage availability saw a modest improvement Q3, but not enough to reverse the large fall seen in Q2. Meanwhile, credit availability to commercial property fell sharply during the quarter, and lenders expect to …
15th October 2020
The big downward revision to employment in the labour market statistics reveals that renters have seen a larger hit to employment than homeowners. This supports our view that house prices will be resilient next year, while private rents will probably …
14th October 2020
Overview – The new COVID-19 restrictions will put the economic recovery on ice for the next few months and will prevent the economy from climbing back to its pre-crisis level until the end of 2022. The possibility of even tighter COVID-19 restrictions and …
13th October 2020
Retail has been hit hard by the COVID-19 crisis and lasting changes to online spending will bring further pain. While our estimates suggest that the impact is likely to be less severe than structural change in offices, the rental outlook is expected to …
8th October 2020
One last surge in housing market activity Housing market activity rose for a fourth consecutive month in September, but the market may be approaching an inflection point. We expect house price growth and transactions to cool by the end of the year, as …
House price growth surges to four-year high House price growth surged to a four-year high according to the Halifax index. But there are tentative signs that the pent-up demand driving the latest mini-boom may be running out. We think house prices are …
7th October 2020
Construction growth edges up in September The construction PMI strengthened in September, driven by an improvement in both the commercial and residential sectors. Still, with fresh virus restrictions likely to hit commercial occupier demand further, …
6th October 2020
There are tentative signs that the housing market mini-boom is running out of steam. We think house price growth and transactions are probably close to their peak. As pent-up demand from lockdown is expended in the coming months, we expect house price …
2nd October 2020
House price growth surges again House prices are rising at their fastest rate in four years. But price gains are likely to slow as the pent-up demand driving the market now is expended. Looking ahead, we think a weak underlying economy and the end of the …
30th September 2020
Strong bounce in house purchase lending continues August’s lending data showed another sharp increase in house purchase approvals. But, while this buoyancy may last for a few more months, the current spike in demand is likely to be short-lived. With the …
29th September 2020
London’s housing recovery is lagging the rest of the UK. The post-lockdown rise in housing demand has been weaker than elsewhere, while the latest evidence points to no resurgence in house price growth. This trend may reflect the rise in working from …
25th September 2020
We don’t think the surge in high-LTV interest rates signals an incoming credit crunch. Rather, it probably reflects lenders prioritising demand from less risky borrowers. As the surge from pent-up demand wanes in the coming months, we expect high-LTV …
18th September 2020
The housing market has so far seen a V shaped recovery. House purchase mortgage approvals have already recovered to their pre-virus level, while house prices have reversed the dip recorded earlier in the year. But as pent-up demand is expended and the …
16th September 2020
Housing market maintains its upward momentum The housing market strengthened further in August. But as pent-up demand from lockdown dries up over the coming months, conditions will soon cool. We expect house price growth to stagnate next year, while we …
10th September 2020
Even after the immediate threat of COVID has receded, we expect as many as 50% of office-based employees will work from home at least once a week. But the move away from cities and toward the suburbs should prove short-lived. Most of those leaving cities …
9th September 2020
House prices bounce back strongly House price growth in August exceeded expectations, surging to 5.2% y/y. But pent-up demand will soon be expended, while a weak economy, cautious lenders and the end of the stamp duty cut will weigh on prices. We think …
7th September 2020
The housing market recovery has exceeded all expectations and we have substantially upgraded our 2020 house price forecast. But as pent up demand runs out, a weak economy, tight credit conditions and the end of the stamp duty cut will hold back further …
4th September 2020
Residential recovery outpaces commercial While the recovery in both commercial and residential construction lost momentum in August, growth in housebuilding far outperformed commercial. This trend is likely to continue, reflecting the stronger outlook for …
