Filtered by Subscriptions: UK Housing Use setting UK Housing
Construction sentiment worsens as economic headwinds mount The second consecutive fall in the construction PMI in May points to a sustained slowdown in development activity. And with the new orders balance easing and optimism of future demand declining, a …
8th June 2022
Momentum in house prices remains strong for now The slight easing in the Halifax measure of annual house price inflation reflects an outsize increase in prices a year earlier rather than any loss of momentum. But there are signs that rising mortgage rates …
More evidence that house price increases have peaked There was another slowdown in the annual rate of house price inflation in May according to the Nationwide. That was in line with our expectation of sustained slowdown through the rest of the year, …
1st June 2022
Approvals drop back to pre-COVID-19 levels in April The drop in mortgage approvals in April provided early evidence that interest rate increases are starting to hurt activity. As we expect the rises in both policy and mortgage rates to continue apace over …
31st May 2022
The consensus among professional forecasters is that house price growth will slow but remain positive over the coming years, as a robust jobs market prevents forced sales. But even in the absence of financial distress, we think that a decline in prices is …
26th May 2022
Record high rental growth at the start of the year is likely to mark a peak given signs that tenant demand is starting to ease. But strong wage growth and the rising cost of buying as mortgage rates rise mean rental growth is set to ease rather than …
19th May 2022
Overview – If we are right that the Bank of England will have to raise interest rates to 3.00% to stamp out inflation then we are on the cusp of the fastest increase in mortgage rates since the late 1980s. That caused house prices to fall by 20%. But the …
13th May 2022
Rising mortgage rates not yet hurting demand The housing market shrugged off the effects of rising mortgage rates and the cost-of-living crisis in April as intense competition between buyers bid up prices further. However, with mortgage rates set to …
12th May 2022
Reality bites as PMI shows signs of a slowdown in activity The construction PMI for April showed that building activity remained solid, but that the pace of growth has slowed. An easing in new orders growth also hints at a further slowdown ahead, as the …
6th May 2022
A strong April, but approaching a turning point In contrast to Nationwide’s measure of house price inflation, there was no sign of house price growth slowing in the Halifax figures for April. But with mortgage rates only just starting to climb to reflect …
Robust for now Unchanged mortgage approvals in March showed that the housing market remained buoyant throughout the first quarter. But the emerging trend of rising mortgage rates on new loans rising will only accelerate, which will reduce demand and …
4th May 2022
Signs the housing market is turning the corner mount The slowdown in house price inflation in April adds to signs that the housing market is beginning to cool and suggests that the peak in house price inflation is now behind us. We expect house prices to …
29th April 2022
Our new, higher, interest rate forecasts mean that we now expect house prices to fall marginally in 2023 and 2024. While there are risks on both sides, our base case is that prices drop by 5% overall, reversing a fifth of the surge in house prices since …
27th April 2022
Overview – Even though a further surge in CPI inflation to a 40-year high of 10% in October will take the economy to the brink of recession, we think the Bank of England will raise interest rates from 0.75% now to a peak of 3.00% in 2023 to contain …
26th April 2022
Despite the permanent increase in working from home, the end of pandemic restrictions has triggered a resurgence in demand in London’s rental and house purchase markets. Annual inflation in the ONS House Price Index for London has already risen from 3.8% …
22nd April 2022
Despite facing very strong demand housebuilders appear reluctant to commit to new sites. This is because a shortage of materials is delaying completions, while rising interest rates and the end of the Help to Buy Equity Loan scheme mean demand is …
19th April 2022
Rising market rates tighten conditions Banks expect mortgage availability to fall back in Q2 as lenders push up borrowing rates to reflect increases in Bank Rate, but other lending criteria are expected to be stable or loosen. The availability of mortgage …
14th April 2022
Signs of a more balanced market emerging The latest RICS survey brought early signs that, having been a sellers’ market for the past two years, the balance is shifting. That suggests we are right to expect a moderation in house price growth in the second …
Still no sign of house price growth cooling Another large jump in house prices in March kept Halifax’s measure of house price inflation comfortably in double figures. With competition between buyers still intense, house price inflation could remain high …
7th April 2022
PMI results mixed, with more concern on the horizon The continued strength of the construction PMI in March suggests that activity in the sector increased despite ongoing headwinds from supply constraints and cost inflation. The rise in new orders …
6th April 2022
Despite strong house price growth across the country over the past two years, including in regions that had lagged behind, valuations are most stretched in the usual places. As a result, house prices are still most vulnerable to rising interest rates in …
4th April 2022
House price growth hits 18-year high, but slowdown expected The acceleration in house price growth to an 18-year high of 14.3% will add to concerns that the pandemic housing market boom is getting out of hand. With mortgage rates rising, house price …
31st March 2022
While buying a home is likely to remain a better option than renting, despite rising mortgage rates, the decision will become more finely balanced. That will mean some prospective first-time buyers rent for a bit longer, helping to cool house price growth …
30th March 2022
Decline provides an early sign that demand has begun to wane Higher than usual home moving activity ensured that mortgage approvals remained substantially above pre-virus levels in February. But the decline compared to January could be an early sign that …
29th March 2022
We think that property markets are the weak link when it comes to the impact of tightening monetary policy. A modest rise in interest rates might only cause price falls in a few obvious candidates. But rates might have to rise only a bit further than we …
25th March 2022
Most leading indicators of housing market activity and house prices remain strikingly buoyant, but the first signs that demand will soften are now appearing. There is no question that house prices will continue to rise apace over the next few months. …
24th March 2022
Mortgage rates have been slow to respond to rising market interest rates, with lenders choosing to take a hit to their margins rather than fully offset increased funding costs. But we don’t think there is any more scope for rises in Bank Rate to be …
17th March 2022
No let-up in housing market activity The February RICS residential survey continued to point to resilience in UK housing markets. New enquiries remained strong and, while there is some evidence that supply constraints may be easing at last, the number of …
10th March 2022
Lending set to rebound after stamp duty related pause While mortgage lending was softer at the end of last year that largely reflected the jolt from the ending of stamp duty discounts. More recent data point to very strong market activity in early 2022 …
8th March 2022
House price inflation reaches 15-year high The gain in house prices reported by Halifax for February pushed the annual rate to 10.8%, its highest since June 2007. With new supply limited and mortgage rates still relatively low, we suspect that house price …
7th March 2022
PMI rises further as housing activity accelerates The construction PMI rose to its highest level in eleven months in February. Although encouraging, supply constraints remain a major impediment and input costs high, which we think will limit growth in the …
4th March 2022
The sharp downturn in consumer confidence in February showed that the cost of living crisis was starting to bite even before the war in Ukraine began. But despite the worrying correlation between house prices and sentiment, our base case remains that …
3rd March 2022
House prices not headed for a bust following pandemic boom The further substantial rise in house prices in February took the increase since the pandemic began to a round 20% and begs the question whether house prices are getting too high. While we do …
2nd March 2022
More evidence that home movers remain active A third consecutive monthly rise in mortgage approvals suggests that housing market activity will remain higher than usual in the coming months as households continue to adjust to remote working. The rise in …
1st March 2022
Much has been made of UK property’s openness to Russian money following the invasion of Ukraine. But since the depreciation of the Russian ruble in 2014, Russians have become far less important to demand. As a result, we think the effects on UK property …
25th February 2022
Homeowners appear to be pressing ahead with plans to move house even though stamp duty is now fully reinstated. Transactions inevitably dipped last October as sales were rushed through in September to take advantage of the tax relief. But since then, they …
23rd February 2022
Our new, higher interest rate forecast suggests that mortgage rates will climb to an eight-year high in 2023, making house prices look expensive by historical standards. But the overvaluation won’t be as extreme as it was on the eve of the financial …
15th February 2022
We already expected that rental growth would surge to a decade-high this year. But the strength of leading indicators and the low level of rents relative to income by historical standards suggest rental growth will exceed even that forecast and remain …
11th February 2022
Housing market remained exceedingly tight at the start of 2022 The largest rise in new buyer enquiries for nine months and a reversal of the December dip in sales volumes confirmed that the housing market remained extremely tight at the start of the year. …
10th February 2022
Slowdown unlikely to signal cooling market yet The smaller gain in house prices in January reported by Halifax is unlikely to mark the start of a sharp deceleration in house price growth. With the supply of homes for sale still very limited and mortgage …
7th February 2022
Overview – It is likely to take longer than most expect for rising interest rates to cool the housing market. Mortgage rates have only just begun to rise from the record low reached in November, and limited supply, high household savings, and the boost to …
4th February 2022
Housing activity to remain buoyant despite supply challenges The tick up in mortgage approvals in December suggested that the dip in housing market activity expected after the stamp duty holiday has already come and gone, and that transactions will stay …
1st February 2022
House prices continue to surpass expectations There was no cooling in the housing market at the turn of the year, as the Nationwide house price index recorded its largest January increase for 17 years. We suspect that prices will continue to surpass …
The jump in transactions during the pandemic was larger in London than other regions as the market didn’t experience the same drop in supply as elsewhere. That reflected many existing homeowners adjusting to remote working by moving further afield, giving …
25th January 2022
Demand-supply imbalance continues to drive up prices The number of homes being listed for sale dropped again in December while demand continued to climb. As a result, we think house prices will continue to rise at pace in the near term. At -14, the new …
20th January 2022
A breakdown of house price growth over the past two years confirms that remote working has altered the nation’s housing needs. But what households can afford, rather than what they desire, will be a more important driver of house prices over the next few …
19th January 2022
Overview – Although the hit to households’ real incomes from a bigger surge in CPI inflation than most expect (to a peak of almost 7% in April) explains why we think GDP growth will be slower this year than the consensus forecast, we still think that the …
17th January 2022
Recent data have reinforced concerns about inflation risks in the UK. We remain of the view that property investments provide only limited long-term protection against higher prices, but of the individual asset types, we think industrial and residential …
14th January 2022
Credit availability to remain good, but mortgage rates to rise The Q4 credit conditions survey suggests that, while credit conditions will remain loose, scope for lenders to absorb further increases in interest rates into their margins has run out. A …
13th January 2022