Filtered by Subscriptions: UK Housing Use setting UK Housing
Stabilisation in approvals consistent with robust demand Mortgage approvals stabilised in November, consistent with other evidence that demand remained robust after the stamp duty holiday ended. Even though approvals have softened to a similar level to …
4th January 2022
The continued strength of the housing market after the end of the stamp duty holiday shows that it was far more than the tax break that kept prices surging in 2021. The three key drivers of demand - low mortgage rates, high household saving, and a …
23rd December 2021
While the hike in Bank Rate from 0.10% to 0.25% came a little earlier than we expected, it does not change our view that the overall rise in interest rates over the next couple of years will be modest. However, the continued strength of both inflation and …
16th December 2021
While mortgage lending slowed in Q3 as the stamp duty holiday was tapered, an easing of deposit requirements supported first-time buyer demand. Meanwhile, the Financial Policy Committee’s plan to withdraw its affordability stress test will allow banks to …
14th December 2021
Consumers will feel a squeeze on their finances next year as inflation and taxes rise. That will take some wind out of the housing market’s sails, but it will not cause a correction. A spike in inflation and a hike in National Insurance contributions in …
13th December 2021
Continued strength suggests upside to prices in 2022 There was no sign of any let up in the house price boom in November as new buyer enquiries rose again. Another strong survey also suggests that the market could continue to run hot for some time, …
9th December 2021
Quarterly growth takes further step up to post-GFC high The Halifax house price index suggests that not only did the end of the stamp duty holiday fail to dent the market, but that house price growth has since accelerated to a post-financial crisis high. …
7th December 2021
Still no sign of house price growth cooling House prices recorded another above-consensus gain in November as strong buyer demand bid prices up further. There is little sign of that dynamic changing anytime soon, so we expect the consensus forecast for …
1st December 2021
Dip in mortgage approvals after stamp duty holiday ends Mortgage approvals remained robust in October after the end of the stamp duty holiday, only easing back into line with their pre-pandemic average. With demand strong, we suspect that mortgage …
29th November 2021
The most comprehensive statistics on housing supply confirmed that the pause in construction in Q2 2020 caused completions of new homes to drop back. Housebuilding activity has since recovered but materials shortages, the end of the Help to Buy Equity …
Estate agents undoubtedly have a very limited number of homes on the books. But the idea that the lack of supply is due to few homes being put up for sale is a misconception. High numbers of transactions inevitably mean that listings are higher than …
24th November 2021
The end of the stamp duty holiday has had remarkably little impact on buyer demand. If anything, the imbalance between strong home purchase demand and limited supply is intensifying. Indeed, Rightmove reported that the average time to sell a home …
19th November 2021
Anticipation of higher interest rates has pushed up fixed mortgage rates. And with scope for banks to absorb higher costs in their margins now exhausted, future changes in interest rate expectations will be fully passed through to mortgage rates. But as …
12th November 2021
Market remains tight after stamp duty holiday Rather than representing a “rush before mortgage rates rise”, we suspect that the rise in new buyer interest in October will prove durable. With inventory very limited, that points to house prices rising by …
11th November 2021
Overview – We think it will take longer than most others expect for rising interest rates to bring down the curtain on the COVID-19 house price boom. A large stock of household savings, the ongoing adjustment to home working and very limited stock on the …
8th November 2021
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
