Filtered by Subscriptions: UK Housing Use setting UK Housing
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 But lenders have since withdrawn such loans en masse, owing to fears of a house price collapse.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
Encouraging results expected to be a false dawn UK housing market activity rose again in February according to the RICS. But as the survey was conducted before the escalation of the coronavirus crisis and related financial market turmoil, we expect any …
12th March 2020
High LTV lending eases at the end of 2019 The latest mortgage statistics show an easing in the share of higher LTV loans at the end of 2019, though there was evidence that high LTI loans have risen slightly. Overall, our view remains that high house …
10th March 2020
Coronavirus fears will cut short the housing market recovery, and we have reduced our forecasts for house price growth in response. What’s more, the risks to the market – particularly housing transactions – are now firmly on the downside. Recent months …
6th March 2020
House price pressures cool Annual house price growth on the Halifax index cooled in February, suggesting that the market has lost steam. Looking ahead, with the coronavirus likely to affect sentiment as well as economic activity in the coming months, the …
Sharp rise in construction output The IHS Markit/CIPS Construction PMI pointed to the strongest rise in construction since December 2018. This was driven by improvements in both commercial property and housing. But with the economic outlook weak and …
3rd March 2020
In light of the accelerating spread of the coronavirus – and the economic disruption that is likely to follow – we are pulling down our GDP growth forecasts for Q1 and Q2 of this year. Growth is likely to rebound over the second half of the year, but most …
2nd March 2020
Post-election lending surge in January House purchase mortgage approvals surged in January, and leading indicators point to further gains in the coming months. But with house prices high, economic growth set to stay weak and uncertainty to return later …
House prices gather momentum House prices gathered momentum in February, and leading indicators point to further near-term gains. But this latest boost reflects sentiment, while the fundamentals argue against a sustained acceleration. We expect house …
28th February 2020
The next few months could see a modest jump in London house prices, and we have upgraded our forecast to a 4% gain for 2020. But with the house price to earnings ratio still exceptionally high, any recovery in the capital is unlikely to be sustained. Once …
25th February 2020
Leading indicators could be understating the coming recovery in housing sales. While we maintain our view that the recovery in transactions and lending will be modest, this suggests that the risks to our forecasts are on the upside. The housing market …
21st February 2020
The post-election housing market recovery is likely to last a few more months, and we have upgraded our 2020 forecasts in response. But the housing market fundamentals were unchanged by the election. As a result, we expect the surge in activity to subside …
14th February 2020
Boris bounce extends into January Housing market activity rose again in January, driven by a post-election rise in sentiment. This bodes well for the near-term, but the upward momentum can’t be sustained indefinitely. Indeed, we expect any surge in …
13th February 2020
No signs of acceleration in January Annual house price growth was broadly flat in January according to the Halifax index, suggesting that the surge in prices around the election may be short lived. Indeed, with house prices still high relative to incomes, …
7th February 2020
