Filtered by Subscriptions: UK Housing Use setting UK Housing
Credit crunch for mortgage lending Mortgage credit availability collapsed in Q2, while commercial loan conditions improved on the back of government loan guarantees. Looking ahead, lenders expect both commercial and residential property lending to fall, …
16th July 2020
Global property markets are expected to see a lasting impact from the effects of the COVID-19 outbreak. Over the coming weeks, we will publish a series of pieces looking at the post-pandemic future across the main property types. We start this by …
15th July 2020
The housing market outlook is improving. Government support and lender forbearance have dulled the impact of the virus on housing. Indeed, housing demand has bounced back more strongly than expected. Meanwhile, falling interest rates will support housing …
The latest stamp duty cut will bring forward some housing demand and, by increasing perceptions that the government is standing behind the market, the cut reduces the chance of a house price crash. That said, with the potential tax savings unable to …
13th July 2020
Activity rebounds in June The latest RICS survey suggest activity is increasing at its fastest rate since 2013, though these results should still be read with caution as the UK moves out of lockdown. Nonetheless, market sentiment is clearly recovering …
9th July 2020
House prices broadly flat in June According to the Halifax index, house prices were broadly stable in June. Looking ahead, with the furlough scheme due to end soon and lenders increasingly risk averse, further house price falls are likely. But there are …
7th July 2020
Construction rebound outstrips expectations June’s PMI construction jumped back above 50 for the first time in four months, confirming that activity is starting to return to normal. The improvement was driven by both commercial and residential sectors and …
6th July 2020
The coronavirus extinguished a nascent surge in London house prices in Q1. Instead, housing demand in the capital collapsed during lockdown, and has been comparatively slow to return. That underperformance is likely to continue in the near-term, as virus …
1st July 2020
House prices fall sharply again in June House prices saw another steep fall in June, but low transactions volumes cast doubt on the accuracy of the figures. Looking ahead, there are signs of a recovery in demand, but lenders remain cautious. We think …
Surprise fall in mortgage approvals Despite the housing market reopening half-way through May, house purchase mortgage approvals once again fell sharply. But signs of a bounce back in buyer demand in June, combined with resilient mortgage availability …
29th June 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
The recent withdrawal of high LTV products could impede as many as one in four prospective first-time buyers. More broadly, tighter credit conditions reinforce our view that, despite signs of a surge in demand, lending and transactions won’t recover their …
26th June 2020
Transactions in April and May have surprised on the upside. What’s more, there are signs that new demand in June has been stronger than expected. Of course, the economic damage from lockdown suggests that sales won’t sustain their pre-virus level anytime …
25th June 2020
The rental market data have been surprisingly resilient. But informal rent cuts may be happening under the radar, while government support has delayed the crunch point for households. As a result, we have pushed back our expected fall in rents to the end …
18th June 2020
Surveyors point to modest fall in house prices May’s RICS survey points to a modest fall in house prices. But the rest of the survey is harder to interpret. It suggests that activity fell from April’s already very low level, despite lockdown restrictions …
11th June 2020
While the housing market has reopened, there are still limited data on the pace of improvement. Given the economic damage, uncertainty and weak pipeline of in-progress housing sales, we expect the recovery in activity to be gradual. Meanwhile, the main …
10th June 2020
High LTV lending edged down in Q1 High LTV lending was already edging down before the coronavirus hit, as competitive pressures among banks plateaued. But lenders have since withdrawn such loans en masse, owing to fears of a house price collapse. So we …
9th June 2020
House prices edge down as lockdown is eased According to the Halifax index, house prices fell for a third consecutive month in May as lockdown was eased. But the fall of 0.2% m/m was very gradual. That supports our view that house prices will see a modest …
5th June 2020
Gradual recovery in property construction May’s rise in the construction PMI suggests that April was probably the low point for activity. The improvement was driven both the commercial and residential sectors. Looking ahead, with lockdown gradually being …
4th June 2020
Lending hit record low during lockdown House purchase mortgage approvals fell by 71.8% m/m in April – broadly in line with our expectations. Looking ahead, with the housing market having reopened in May, that probably marks a low point. Still, given the …
2nd June 2020
Largest monthly house price fall since 2009 House prices slumped in May due to the economic fallout from the coronavirus. Given the magnitude of the economic shock, further price cuts are extremely likely. That said, we think the extensive policy support …
The extended mortgage holiday scheme will cushion the blow for financially distressed households. Alongside the other financial support already available, it further reduces the chance of an immediate house price crash. But large downside risks to house …
22nd May 2020
The housing market ground to a halt in response to the coronavirus lockdown, but looking ahead, restrictions on housing activity have been eased. Still, the huge hit to the economy from the virus combined with weakened buyer confidence suggests that the …
20th May 2020
Easing movement restrictions, combined with government support and strong underlying demand will allow housebuilding to bounce back fairly quickly. But weak occupier demand and falling capital values mean the recovery in commercial property construction …
15th May 2020
Housing market activity hits all-time low With the housing market reopening, April’s slump in sales may be the market’s lowest point. But any recovery will start from a low base and face serious economic headwinds – from both weak employment and …
14th May 2020
The ban on home buying activity has been lifted by the government. But a weakened economy, uncertainty and behavioural shifts from the coronavirus will hamper the housing market recovery. By the end of the year, we expect housing sales to still be well …
13th May 2020
Low transactions volumes have made house price indices volatile and inaccurate. Indeed, the ONS has suspended publication of the official UK House Price Index, while the Halifax and Nationwide data for April are wildly divergent. Looking ahead, we may …
11th May 2020
Coronavirus triggers house price drop House prices fell for a second consecutive month in April according to the Halifax index. But with low transactions activity likely to be causing extra volatility in the data, readings from the lockdown period need to …
7th May 2020
Construction PMI slumps to record low April’s Construction PMI collapsed to a record low of just 8.2. That was driven by the commercial and residential sectors, which both saw record falls in activity. But looking ahead, with signs that housebuilders are …
6th May 2020
The data now point to two million households with mortgage holidays. This suggests that the peak in arrears may be much higher than during the GFC. But, with mortgage credit quality and banks’ financial positions better than in 2007, the outlook for …
5th May 2020
Shutdown and uncertainty hits lending Mortgage approvals for house purchase slumped by a hefty 24% in March. And with the coronavirus likely to have only cut lending in the second half of the month, we expect an even larger fall in April. House purchase …
1st May 2020
House prices are somehow still rising April’s rise in annual house price growth won’t last. We suspect it reflects both low transaction volumes and delays to processing mortgage applications. As the economic hit to employment from the pandemic continues, …
Unlike in previous downturns, residential property has not been the root cause this time. Even so, house prices will not escape this recession unscathed. If policy support proves effective, if lockdowns hamper property sales, and if demand rebounds later …
29th April 2020
Overview – The housing market will take a deep hit from the coronavirus. We expect housing transactions and housebuilding to drop by 70% in Q2 this year, as physical distancing measures halt activity. Meanwhile, house prices will see the biggest fall …
28th April 2020
A rising LIBOR OIS spread points to nervousness on interbank funding markets. But for the mortgage market, any future credit crunch is more likely to come from lenders’ concerns about the economy, house prices and risk appetite, than a dislocation in …
21st April 2020
Overview – We think it will take the economy a few years to recover from an unprecedented hit to GDP of around 25% triggered by the lockdown implemented to contain the coronavirus. That’s because despite the unparalleled speed and size of the monetary and …
16th April 2020
Mortgage lenders pull up the drawbridge Mortgage availability is set to collapse in Q2. Part of that will reflect limitations caused by physical distancing measures due to the coronavirus. Yet broader concerns about the economy, house prices and shrinking …
Surveyors report a collapse in activity Coronavirus measures have put the housing market on ice. With buyer enquiries and agreed sales in freefall, the market is on track to see a 70% fall in sales this quarter. Meanwhile the collapse in sentiment among …
9th April 2020
While London’s housing market showed signs of life in the first quarter, the coronavirus has ended any hope of a recovery. Indeed, like the rest of the UK, London housing transactions are set to collapse over the next three months, although house prices …
8th April 2020
House prices hold firm before the lockdown The Halifax index recorded flat house prices in March, but that tells us little about the effect of the coronavirus. And with very few housing transactions likely to go through across April and May, the house …
7th April 2020
Construction output grinding to a halt March’s Construction PMI fell to its lowest reading since 2009, with commercial construction seeing a particularly sharp fall. Housebuilding saw a more modest decline, but as revenues dry up over the next few months, …
6th April 2020
The slump in housebuilder share prices reflects the coming collapse in housing sales, which will force builders to shut down production for several months. Indeed, we now expect housing starts to drop by 25% in 2020, with only a partial recovery by 2021. …
3rd April 2020
House prices surge before the coronavirus strikes House price growth accelerated in March, but that reflected sales agreed from before the coronavirus lockdown. Looking ahead, we now expect house prices to fall by around 3% this year. And with the …
2nd April 2020
Final rise in lending before the coronavirus hits February saw strong rise in house purchase mortgage approvals, but the coronavirus will prevent any further gains over the coming months. Indeed, given the stringent social distancing measures now in …
30th March 2020
In light of government advice to delay housing sales, we now expect a 70% q/q fall in house purchase mortgage approvals and transactions in Q2. Meanwhile, our base case is that low interest rates, government support and lender forbearance will prevent a …
27th March 2020
Housebuilding slump deepens Housing starts fell sharply in the final quarter of 2019. With housebuilders now halting construction in response to the coronavirus, and the hit to buyer confidence to persist even after movement restrictions are lifted, we …
26th March 2020
The economic hit from the coronavirus will cool rental demand, while social distancing measures will tip market dynamics in favour of renters. We have downgraded our forecast for rents and now expect them to fall by 1% this year. But rents should recover …
25th March 2020
Banks will be slow to pass on the latest rate cuts, as the economic turmoil in Q2 puts them on the defensive. But as conditions start to normalise, mortgage interest rates will fall further, reaching 1.5% by the end of 2020. In response to the economic …
20th March 2020
We now expect the coronavirus to severely limit housing market activity this year, with transactions and house purchase mortgage approvals falling by 40% in Q2. That said, as long as any pick-up in unemployment is reasonably short lived, a house price …
18th March 2020
Measures of activity and house price pressures were strong in February. But with the coronavirus set to disrupt activity and confidence over the next few months, the housing market recovery is unlikely to last beyond March. Economic indicators point to a …
13th March 2020
