Filtered by Subscriptions: UK Housing Use setting UK Housing
The indication from the Bank of England that Bank Rate of 1.25% would be too high for the economy suggests that the forthcoming rise in interest rates won’t be anywhere near large enough to topple the housing market. Rather, we expect house prices to rise …
5th November 2021
A modest improvement, but supply issues continue to bite Construction firms reported that activity strengthened in October despite higher costs and continued difficulty sourcing materials. The big picture is that until those constraints ease construction …
4th November 2021
House prices maintain their momentum Yet another upside surprise in house prices last month confirmed that the end of the stamp duty holiday in September did little to cool the market. We expect house prices to continue to beat expectations in the near …
3rd November 2021
Europeans are returning to cities, though the return to offices has been much slower and this has had negative effects on city retail. Looking ahead, weaker demand for office and retail will weigh on performance in cities with large concentrations of …
2nd November 2021
Housing market shrugs off the end of the stamp duty holiday Unsurprisingly, mortgage lending spiked in September as buyers rushed to complete before the stamp duty taper period ended. More notable is the resilience of mortgage approvals, suggesting that …
29th October 2021
Shortages of construction materials are unlikely to ease for at least another 6-12 months, restraining activity in the renovation sector and among smaller housebuilders . That is likely to cap housing starts for the next year or so at about 40,000 per …
21st October 2021
Overview – The UK economy is experiencing a taste of stagflation. This won’t be anywhere near as severe or as persistent as in the 1970s. But for the next six months, the worsening product and labour shortages will put the brakes on the economic recovery …
19th October 2021
While the UK has seen house prices boom over the past year, central London has not joined in as increased remote working led buyers to shun the capital for more space in the suburbs and further afield. (See Chart 1.) But indicators of demand show that it …
18th October 2021
Improving credit conditions may protect housing market from higher rates An ongoing improvement in credit availability may offset the increase in Bank Rate we expect in 2022. That offers support to our forecast that mortgage rates will remain low. A …
14th October 2021
Housing market shrugs off broader economic headwinds The RICS survey suggests that the housing market has shrugged off the deterioration in sentiment about the broader economy so far. Demand stabilised at a high level in September while stock remained …
Prices jump despite end of tax break The large rise in the Halifax house price index in September suggests that we are right to think that robust demand and limited inventory will mean that prices record further gains after the stamp duty holiday ends. …
7th October 2021
Recovery in construction falters due to shortages The further drop in the construction PMI in September suggested that the recovery in construction has faltered amid a severe lack of materials and staff, spiralling costs, and softening demand. The drop in …
6th October 2021
We doubt that a larger rise in Bank Rate over the next two years than we previously expected will put much upward pressure on mortgage rates. Low interest rates and increased spending on housing costs will continue to provide a supportive environment for …
1st October 2021
Price growth cools, but only gradually The only small gain in house prices in September suggests that house price growth slowed as the stamp duty holiday was withdrawn. But with inventory limited and demand resilient, we suspect that house price growth …
30th September 2021
Increase in mortgage size another sign of resilient demand While still above pre-COVID-19 levels mortgage approvals edged down in August, suggesting no great rush to move before the stamp duty holiday taper ends at the end of September. But an increase in …
29th September 2021
It is an under-statement to say that house prices have weathered the pandemic well; housing markets are positively booming. Yet the drivers of this rise in prices are rather different to those of the pre-2007 housing boom, meaning that we do not seem to …
28th September 2021
A jump in deposit sizes has been a key driver of the rise in house prices over the past 18 months. While saving is now dropping back, households have built up a large stock of cash assets which will prevent a rapid reversal in deposit size. While not …
27th September 2021
The Evergrande crisis has made waves in financial markets this week. But, while the developed property markets we cover may see some short-term upheaval, we think the impacts outside of China are unlikely to be severe or lasting. For property investors, …
23rd September 2021
There is no doubt that demand cooled after the stamp duty discount was reduced. But a collapse in new listings has eclipsed the decline in new buyer demand, suggesting that prices will at least hold their ground in Q4 when stamp duty returns to normal. …
21st September 2021
The end of the stamp duty holiday may do little to dampen demand and homes for sale are in short supply. The upshot is that house price growth will remain strong into next year, so we have revised up our forecast for house price growth in 2022 from 3% to …
16th September 2021
Surge in home moving pushes lending up to post-financial crisis high The further surge in mortgage lending to a fresh post-financial-crisis high and booming house prices begs the question whether there is over-exuberance in the housing market. But as the …
14th September 2021
Prices and transactions expected to remain buoyant While demand continued to soften in August limited stock on the market points to house price inflation remaining high in the near term. And despite the end of the stamp duty holiday, surveyors expect …
9th September 2021
Shrugging off the stamp duty holiday taper While annual house price inflation cooled from 7.6% to 7.1% in August according to Halifax, the solid gain in house prices on the month confirms that the housing market is weathering the winding down of the stamp …
7th September 2021
Materials shortages restrain activity The further easing in the construction PMI in August was due to materials shortages rather than any softening in demand. The drop in the headline construction PMI from 58.7 in July to 55.2 in August suggested that, …
6th September 2021
While the furlough scheme was critical in preventing the COVID-19 recession from dragging down house prices, we don’t think that the withdrawal of the scheme poses much of a risk. Meanwhile, the latest data show the end of the repossessions ban and …
2nd September 2021
Surprise August rise highlights resilience to end of stamp duty holiday The unexpectedly large rise in house prices in August is yet another reason to think that house price growth will shrug off the end of the stamp duty holiday. It also suggests our …
1st September 2021
Approvals decline as tax break winds down Mortgage approvals continued to fall back in July as the stamp duty holiday was tapered, but they remained above pre-COVID-19 levels. Timely indicators suggest that demand will be resilient even when the tax break …
31st August 2021
The housing market cooled in July as the stamp duty holiday began to unwind. Newly agreed sales and buyer enquiries dropped back, annual house price growth began to stabilise, and transactions fell. However, the RICS balances compare activity to the …
25th August 2021
New plans have extended Permitted Development Rights (PDRs) on commercial property, allowing swifter conversion to residential use. These have been cautiously welcomed, but, in our view, they do not radically shift the outlook for either residential or …
18th August 2021
While the Monetary Policy Committee (MPC) became more hawkish at its August meeting, an increase in interest rates on the scale it expects would not undermine house prices. But more stubborn inflation than anticipated and a hike in Bank Rate to 1.5% by …
16th August 2021
Limited stock supports prices as demand cools Despite new buyer enquiries dropping back in July, house prices continued to rise as buyers competed for limited stock. Sales volumes eased in July as the stamp duty holiday began to be phased out. (See Table …
12th August 2021
Recovery in July, but further slowdown still expected Halifax house prices returned to growth on a monthly last month, partly reversing a weak June figure. But the underlying trend, as the stamp duty discount is phased out, is for a modest slowdown. …
6th August 2021
Construction PMI dips, but underlying demand strong July’s construction PMI figure was slightly disappointing compared with the previous month’s highs. But it continued to point to robust activity and we think any dip is most likely a reflection of …
5th August 2021
Overview – There are already signs that the end of the stamp duty holiday will take some heat out of the housing market, with house price inflation set to cool from 10% to 7% by the end of the year. But as we think that the tax break was just one of …
2nd August 2021
Rush for stamp duty relief drives borrowing to record high A surge in borrowing ahead of the tapering of the stamp duty holiday in July saw new mortgage lending set a fresh record high. Meanwhile, robust mortgage approvals pointed to activity remaining …
29th July 2021
House prices lose a little momentum The drop back in the Nationwide house price inflation in July suggests that the tapering of the stamp duty holiday has taken a little heat out of the market. But as the tax break was just one of many factors that have …
28th July 2021
It is inevitable that transactions will drop sharply after setting a record high in June. But the stamp duty holiday is just one of several factors behind the housing market boom, so house prices should prove resilient to the end of the tax break. The …
21st July 2021
Overview – Our forecast that COVID-19 won’t significantly reduce potential supply means that the economy can run a bit hotter for longer without generating the persistent rise in inflation that would require monetary policy to be tightened. Admittedly, …
20th July 2021
Easing lending conditions to support house prices A further easing of concerns about the outlook for property prices and the economy suggests that mortgage lending conditions will continue to improve. That will help ensure that house prices are resilient …
15th July 2021
While London rents are set to reverse some of the fall of the past year, we doubt the premium of rents in the capital over the national average will return to its pre-virus level. But outside London rental growth is set to accelerate sharply. London …
13th July 2021
Market set to remain tight as stamp duty holiday ends Activity and house prices were extremely strong again in June according to the RICS survey, although there was a distinct softening in the more forward-looking balances. As supply remains limited, we …
8th July 2021
Signs of market softening as stamp duty holiday winds down While we would be wary of reading too much into the small decline in house prices in June reported by Halifax, timely measures of house prices are consistent in pointing to a moderation in house …
7th July 2021
Construction booming despite difficulty sourcing materials Despite a further deterioration in the availability of building materials, construction output rose at the fastest pace since 1997 in June. That suggests output in the sector is now well above …
6th July 2021
London house prices have underperformed the national average over the past year as the pandemic has led to a shift in demand away from inner cities. Arguably London was due a period of weaker price growth even before the pandemic hit, following the …
2nd July 2021
Mortgage lending remains strong The tick up in mortgage approvals for house purchase in May left them 33% above pre-virus norms, and timely indicators suggest that mortgage lending will remain robust despite the looming end of the stamp duty holiday. The …
29th June 2021
House price growth peaks at a 17-year high House prices recorded a fifth consecutive monthly rise in June, the final month before the stamp duty threshold begins to return to its usual level. There are few signs of market dynamics changing dramatically as …
Inflation in the cost of construction materials has soared as resurgent new home development led to strong demand at the same time as supply was still recovering from disruption due to the pandemic. It is likely to peak soon as supply disruptions ease, …
24th June 2021
The housing market has had its busiest start to the year for 14 years as changing preferences due to the pandemic, forced saving, low mortgage rates, and the stamp duty holiday have led swathes of existing homeowners to enter the market. We estimate that …
17th June 2021
The early evidence suggests that the end of the evictions moratorium will not result in a huge wave of evictions. And while the end of the furlough scheme presents a risk, we suspect that the easing of restrictions will have allowed the economy to recover …
11th June 2021
Looming end of tax break yet to bite The looming end of the stamp duty holiday has only applied the slightest dab to the brakes of the housing market thus far. But while the new buyer enquiries started to ease, sales instructions fell more sharply …
10th June 2021
