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Lower mortgage rates see house prices jump in December The big 1.1% m/m increase in the Halifax house price index confirms that falls in mortgage rates are translating into renewed increases in house prices. Given further recent falls in mortgage rates, …
5th January 2024
Rise in mortgage approvals set to continue The rise in mortgage approvals in November was little surprise given the sharp drop back in mortgage rates since July. Given recent further falls in swap rates, mortgage rates are likely to continue to fall from …
4th January 2024
Flat prices in December confirm 2023 resilience Unchanged house prices in December ensured that over the course of 2023 they fell by much less than forecasters had expected. With mortgage rates falling, it is increasingly likely that house prices avoid …
29th December 2023
While we got mortgage rates and lending roughly right in 2023, house prices fell by less than we expected as longer mortgage terms, strong demand from cash buyers, and tight supply came together to support them. There is little reason to think that these …
28th December 2023
Large downward shifts in interest rate expectations mean that mortgage rates will continue to fall for the next month or two. That will support some recovery in activity and means that price declines are behind us for now at least. As we expect the Bank …
18th December 2023
Falling mortgage rates breathe life back into the market Declining mortgage rates have already generated a significant improvement in demand, with the new buyer enquiries and sales expectations balances recording their strongest readings for over a year …
14th December 2023
Falls in financial market interest rate expectations mean that mortgage rates will drop to a six-month low in December. That will support a further recovery in housing market activity in the near term. But, if we are right to think the Bank of England …
13th December 2023
The detailed mortgage lending data for Q3 show that the high cost of borrowing has continued to price many out of the market and made new BTL investment unattractive. But while arrears are rising, they are not translating into repossessions so we still …
Halifax confirms that prices are on the rise again The second consecutive monthly rise in the Halifax house price index in November mirrored the increase in the Nationwide index, confirming that house prices have not only stabilised, but are rising. …
7th December 2023
This page has been updated with additional analysis since first publication. Construction PMIs once again below 50 in November The headline CIPS construction PMI barely changed in November, settling at 45.5 from 45.6 in October, and was still below the 50 …
6th December 2023
Overview – With higher interest rates taking longer to percolate through the economy, we now think the recession will be shallower and GDP growth will stay weak throughout all of 2024. It’s a softer landing for the economy, but the runway is longer. And …
5th December 2023
Andrew Wishart, who leads our UK housing coverage, presented an Economic Update to attendees of the Land, Planning and Development Federation Annual Conference in London on the 30th November. The presentation addresses the questions: Is the economy in …
1st December 2023
Rising prices continue to confound forecasters The further small increase in the Nationwide house price index in November was unexpected and came on the heels of an even larger rise in October. It means house prices are on track to fall by just 2% y/y in …
In this Global Economics Update , we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary policy mean that the biggest risks relate to central …
30th November 2023
Trough in mortgage approvals behind us With mortgage rates easing, the rise in mortgage approvals in October confirms that the trough in mortgage approvals is behind us. But with mortgage rates unlikely to fall much below 5% until the second half of 2024, …
29th November 2023
Overview – Surprisingly resilient demand, high inflation, and limited supply mean a severe drop in house prices will be avoided. With the peak in mortgage rates now behind us and the labour market in good shape, there is no clear trigger for another …
21st November 2023
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
While the official measure of rental growth is running at record highs, pay has risen even faster. So, at face value rental affordability is good by historic standards. But that doesn’t account for the fact that market rents have jumped by more than the …
13th November 2023
A tentative improvement The past prices balance remained deeply negative in October contradicting the 1% m/m increases in house prices recorded by both Halifax and Nationwide. But a recovery in buyer enquiries suggests the decline in mortgage rates since …
9th November 2023
The rise in house prices in October was a challenge to our long-held view that high borrowing costs will cause them to drop further. The resilience of prices in part reflects longer mortgage terms, which are reducing mortgage payments. And a tight labour …
7th November 2023
This page has been updated with additional analysis since first publication. Confirmation house prices have stopped falling The increase in the Halifax house price index in October confirmed that house prices are rising, suggesting that the high cost of …
This page has been updated with additional analysis since first publication. Housing suffers but commercial surprisingly resilient The uptick in the headline CIPS construction PMI from 45.0 in September to 45.6 in October still left it below the 50 …
6th November 2023
House prices confound expectations The large increase in house prices in October was a massive surprise given higher mortgage rates should be severely restricting the number of people able to buy and the amount they can spend. But at present, stretched …
1st November 2023
London house prices have fallen by less than we anticipated, and stopped falling altogether in Q3. However, the high level of house prices compared to incomes should mean that higher mortgage rates weigh particularly heavily on demand from mortgaged …
30th October 2023
Approvals bottom out, but will remain low The drop in mortgage approvals in September left them a third below their usual level in the years leading up to the pandemic as high mortgage rates put homeowners off moving and priced many first-time buyers out …
The proposed extension to the Mortgage Guarantee Scheme could prove a good counter-cyclical policy in areas where house prices are relatively low. But the scheme has far less impact in London and the South where a much bigger deposit than 5% is needed to …
25th October 2023
Our forecast that the Bank of England won’t start cutting interest rates until the second half of 2024 means mortgage rates are likely to stay between 5% and 6% until mid-2024. While transactions volumes have only seen a modest decline so far, very weak …
23rd October 2023
The diffusion of AI technologies should be a fillip for the global economy over the coming years. That will bring benefits for real estate performance in developed economies, particularly in those office markets with concentrations of knowledge …
20th October 2023
House prices are rising according to the Office for National Statistics (ONS) but falling according to Halifax and Nationwide. Consistent downward revisions to the ONS House Price Index mean that we think the Nationwide and Halifax indices are a more …
19th October 2023
Surging interest rates caused mortgage demand to slump in Q3 at the same time as rising defaults led lenders to tighten mortgage credit conditions. Similarly, it became more difficult to secure commercial real estate loans. We expect availability of …
12th October 2023
Surveyors reported the most widespread price falls since February 2009 in September as mortgage rates of over 5% took their toll. Looking ahead, a further slide in house prices appears inevitable. The drop in the past prices balance to a fresh 14-year low …
Labour has made housing a major theme of its conference, and the party’s attitude towards New Towns and social housing means that the next election could prove a turning point in the structure of the UK housing market. Over the past 30 years successive …
10th October 2023
Near-term momentum in house prices is downwards The sixth consecutive monthly decline in the Halifax House Price Index in September leaves it significantly more downbeat than the Nationwide figures about near-term momentum in house prices. Given the …
6th October 2023
This page has been updated with additional analysis since first publication. Construction PMI falls below 50 as commercial balance plunges The decline in the headline CIPS construction PMI from 50.8 in August to 45.0 in September took it below the 50 …
5th October 2023
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
Buying a first home has become increasingly difficult over the past 30 years. A high income is still essential, but other circumstances such as whether the individual is buying as part of a joint-income couple or has significant family wealth have become …
2nd October 2023
Pause in price falls unlikely to mark the trough The stabilisation of house prices in September was a surprise given mortgage rates are still well above the level which allowed the first leg down in house prices to bottom out. But leading indicators of …
Approvals to remain weak for the next six months The further decline in mortgage approvals in August to their lowest level since the aftermath of last autumn's “mini” budget showed that high mortgage rates are keeping home purchase demand very weak. Our …
29th September 2023
As we anticipated , housing starts in England spiked to their highest level on record in Q2 as builders began work early to avoid having to conform with the Future Homes Standard. More timely monthly data show that starts slumped in July and August in …
28th September 2023
Despite ending the interest rate hiking cycle today, the Monetary Policy Committee (MPC) succeeded in convincing financial markets that interest rates will remain high for some time. As market interest rate expectations determine fixed mortgage rates, the …
21st September 2023
The news that UK Prime Minster Sunak is set to further dilute the government’s climate policies demonstrates that when the political going gets tough, climate policies are the first to fall by the wayside. From a macro perspective, the biggest risk is …
20th September 2023
Our forecast that the Bank of England won’t start cutting interest rates until the second half of 2024 means mortgage rates are likely to stay between 5.5% and 6.0% until mid-2024. While transactions volumes have only seen a modest decline so far, we …
19th September 2023
Overview – A slower fall in core inflation than in the US or the euro-zone will mean that the Bank of England keeps interest rates on hold at the probable peak of 5.50% for longer than the US Fed or the ECB. But our non-consensus forecast that higher …
18th September 2023
Depressed activity remains consistent with falling house prices The further deterioration of the RICS survey figures in August suggest the peak in mortgage rates seen in July are continuing to dampen demand. And as we don’t think rates will fall …
14th September 2023
The Q2 Mortgage Lenders and Administrators statistics showed that higher rates are limiting lending and making it more difficult than ever for single-income households to get onto the housing ladder. Meanwhile, arrears took a step up as another cohort of …
12th September 2023
According to Halifax, house prices are up by 20% compared to 2019 even after their recent falls. But adjusted for inflation they slipped to a seven-year low in August. High mortgage rates point to a further fall in prices in both real and nominal terms. …
7th September 2023
Largest annual fall since 2009 The steep fall in the Halifax House Price Index in August confirmed that the further leg down in house prices we have been forecasting has materialised. If we are right to think that mortgage rates will remain around current …
This page has been updated with additional analysis since first publication. Construction PMIs weaken as new orders fall back The fall in the headline CIPS construction PMI from 51.7 in July to 50.8 in August left it just above the 50 “no-change” mark. …
6th September 2023
The adoption of remote work meant central London was left out of the COVID-19 house price boom. But with house prices in outlying towns and rural areas around the capital starting to stagnate too, there are tentative signs that the relative …
5th September 2023
The start of a new leg down in prices The large monthly fall in house prices in August confirmed that the further leg down in house prices that we have been forecasting has begun to materialise. With mortgage rates likely to remain around current levels …
1st September 2023
