Filtered by Subscriptions: UK Housing Use setting UK Housing
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
Mortgage boom reflects home mover demand rather than generous lending The rise in mortgage lending to its highest level since the financial crisis in Q1 was driven by a huge increase in existing homeowners moving. As a result, the 9% y/y increase in house …
8th June 2021
Stamp duty extension ushers in further house price gains House prices recorded another large increase in May as the extension to the stamp duty holiday continued to turbocharge house purchase demand. Timely indicators show that the end of the tax break is …
7th June 2021
High materials prices fail to stifle strong activity Construction output rose further above pre-virus levels in May despite growing shortages of contractors and materials, and high cost inflation. The rise in the headline construction PMI from 61.6 in …
4th June 2021
Pick-up in approvals after stamp duty deadline extended Mortgage approvals for house purchase rose for the first time since November in April as prospective buyers responded to the extension of the stamp duty holiday. But even before that modest increase, …
2nd June 2021
Prices continue to surge The boost to demand from the extension to the stamp duty holiday caused annual house price inflation to hit a seven-year high in May, and it is set to rise further in June. Thereafter, the end of the tax break should cause house …
1st June 2021
House-price-to-earnings ratios are close to record highs even in regions where there isn’t a shortage of supply. But the varying cost of rent across the country suggests that limited supply is an important reason why house prices are even higher in the …
26th May 2021
Overview – House price growth is on track to reach double figures in the summer before cooling as the stamp duty holiday ends. But with mortgage rates very low, the economy recovering rapidly and households still sitting on a large stock of savings built …
14th May 2021
Demand-supply mismatch intensifies Extremely high demand and limited supply pushed up house prices sharply in April. The market will undoubtedly cool as the rush to buy during the stamp duty holiday eases. But with mortgage rates low and the economy …
13th May 2021
House prices get a second wind A renewed surge in house prices following the extension of the stamp duty holiday drove annual growth in the Halifax house price index up to a five-year high in April. Demand remains very strong, so house prices are likely …
10th May 2021
Construction activity stays strong, though growing signs of cost pressures Strong demand for new projects brought further growth in output during April, according to the latest construction PMIs. But there is also growing evidence of cost pressures, …
7th May 2021
Mortgage advances set record ahead of original stamp duty deadline The surge in mortgage advances to an all-time high in March reflected the rise in housing transaction volumes to their highest level on record in the same month. Meanwhile, despite the …
4th May 2021
Stamp duty extension provides renewed impetus House prices regained momentum in April following the extension to the stamp duty holiday. As a result, an acceleration in annual house price growth into double digits over the summer is now all but …
30th April 2021
All four previous recessions in the UK led to a sharp slowdown or an outright fall in house prices. (See Chart 1.) But 2020 was very different, with house price growth accelerating to a six-year high despite the largest collapse in output for 100 years. …
28th April 2021
The surge in house prices and very high transaction volumes have led to concerns that the housing market is entering a bubble. After all, the house-price-to-earnings ratio has risen to a fresh all-time high. But because interest rates have continued to …
22nd April 2021
Overview – While we think the reopening of the economy and the vaccine rollout will allow GDP to return to its pre-pandemic level a bit earlier than most forecasters, the big difference between us and the consensus is that we don’t think the pandemic will …
15th April 2021
Confirmation banks’ risk appetite is returning Robust house price growth and the prospect of a strong economic recovery have caused banks’ risk appetite to return. As a result, banks expect to increase the availability of high LTV loans and reduce …
Long-term interest rates have risen sharply since the end of 2020 and may rise further, but that shouldn’t be a drag on the housing market. In fact, we think that mortgage rates will fall a little further in the medium term, helping to ensure that the …
13th April 2021
Prices resume increase on extension of policy support The rise in house prices recorded by Halifax in March probably marks the start of a renewed surge in house price inflation into double figures over the summer. The 1.1% m/m rise in the Halifax house …
9th April 2021
Strongest growth in construction activity since 2014 A broad-based strengthening in construction activity pushed up the construction PMI to a six-and-a-half-year high in March. Strong housing and logistics development will continue to support …
8th April 2021
Housing market boom gains renewed momentum The extension of the stamp duty holiday has given the ongoing housing market boom renewed momentum and could push house price inflation up from 6% in March well into double figures by the summer. The rise in the …
While investment in build-to-rent developments has been notably resilient over the past year, we continue to think that the growth of the sector will be slow for two reasons. First, high house prices relative to rents means that build-to-rent investors …
7th April 2021
While London house price growth and transactions volumes have underperformed their national equivalents over the past year, they have been robust in absolute terms. Indeed, the peak in house price growth of 6.7% y/y in November 2020 marked a four-year …
1st April 2021
Cooling in house price growth likely to be temporary The small month-on-month decline in house prices recorded by Nationwide in March probably reflects a temporary softening in demand before the stamp duty holiday was extended. Judging by other …
31st March 2021
Stamp duty deadline pushes lending to a five-year high The rush to beat the original stamp duty holiday deadline in March pushed mortgage advances up to their highest level since 2016 in February. And while approvals for house purchase did start to cool, …
29th March 2021
Recent movements on house prices show only limited evidence that COVID-19 has substantially changed where people want to live. While central London has underperformed, central Manchester and Birmingham appear unaffected. That said, we wouldn’t rule out …
23rd March 2021
There were signs that buyer demand would hold up well this year even before the government announced the extension to the stamp duty holiday in the Budget. Since then, Google searches for property portals have surged to a six-year high. A further …
17th March 2021
Survey points to further gains in house prices The rebound in the RICS survey balances in February suggest that home sales were sustained at a very high level even before further policy support was announced in the Budget. Strong sales and limited stock …
11th March 2021
Home movers drive strong lending Very high home mover activity and resilient first-time buyer demand pushed mortgage lending up to its highest level since the financial crisis at the end of last year. It’s become clear that the stamp duty holiday is only …
9th March 2021
A quick economic recovery, sustained fiscal support, and the housing-specific measures in the Budget mean it is likely that policymakers will successfully mitigate the adverse impact of the pandemic on the housing market. As a result, we now think that …
8th March 2021
Cooling but resilient The easing off in Halifax house price inflation in February marks a contrast with Nationwide’s more upbeat figure. Nonetheless, house prices appeared to be holding onto their 2020 gains even when buyers could no longer expect to …
5th March 2021
Construction sector’s strong innings resumes after rain delay The rebound in the construction PMI in February suggests that the dip in activity in January was due to heavy rainfall rather than any deterioration in demand. While residential activity …
4th March 2021
The prolonged reduction in Stamp Duty, a new mortgage guarantee scheme, and an extension to the furlough scheme should sustain high transactions volumes and prices throughout most of this year. There will still be challenges in Q4, when we expect the end …
3rd March 2021