Filtered by Subscriptions: UK Housing Use setting UK Housing
Renewed surge in mortgage rates begins to take its toll The decline in mortgage approvals to a five-month low in July showed the renewed surge in mortgage rates since April has begun to take its toll. But given the lag between quoted mortgage rates and …
30th August 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% for the next 12 months. While transactions volumes have only seen a modest decline so far, …
25th August 2023
Having risen in value by much less than houses over the past three years, flats were selling at the biggest discount to houses on record at the beginning of the year. But higher mortgage costs are causing buyers to reassess what they can afford to buy, …
24th August 2023
Mortgage arrears were still low in Q2, but the number of Buy-to-Let (BTL) mortgages in early arrears increased at an alarming pace. We suspect that will continue in Q3. A growing number of landlords inability to meet their mortgage costs is likely to lead …
17th August 2023
Market conditions continue to worsen Given the recent rise in average mortgage rates to their highest level since 2008, we are not surprised by the further deterioration in the RICS headline survey figures. And as we do not expect market conditions to …
10th August 2023
Halifax prices edged lower in July With mortgage rates rising to around 6% in July, it was no surprise that the slide in the Halifax house price index continued. Although there might be a modest fall in mortgage rates in the near term, we think they will …
7th August 2023
Overview – 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% for the next 12 months. That will price many buyers out of the market, and …
4th August 2023
The headline CIPS construction PMI resumed its upward trend in July, with the rise to 51.7 more than reversing the drop into contractionary territory in June. All sectors saw an increase in their respective balances, with commercial rising to 54.4, its …
Mortgage rate surge starts to take its toll The slight fall in house prices in July is the first sign of the surge in mortgage rates since mid-May taking its toll. As we expect mortgage rates to remain around their current level for the next 12 months, we …
1st August 2023
Surge in mortgage rates yet to take its toll Given the recent surge in mortgage rates, the increase in mortgage approvals to their highest level since October 2022 in June was a little bit of a surprise. But that reflects the lag between quoted mortgage …
31st July 2023
New home construction has been surprisingly resilient to weaker demand so far this year. But that partly reflects activity being brought forward before building standards were tightened in June. With that boost now over and survey data indicating a …
24th July 2023
The lower-than-expected CPI inflation data for June probably signals the end of the upward march in mortgage rates. But mortgage rates are likely to plateau rather than fall as the Bank of England keeps interest rates high until next summer and lenders …
19th July 2023
Mortgage rates have risen to a level that could cause costs on a fifth of rental homes to exceed the rent. That is likely to lead to a significant number of forced rental property sales, which will undermine the tight supply conditions that have limited …
Lenders expect narrow spreads to keep upward pressure on mortgage rates The narrowing in interest margins reported by mortgage lenders in the Credit Conditions Survey suggests that mortgage rates won’t fall significantly anytime soon. Meanwhile, it became …
13th July 2023
Demand falls at fastest rate since last October As we expected, the rise in the average quoted mortgage rate from 4.4% in May to 5.1% in June caused agreed sales and new buyer enquiries to slump. The deterioration in market conditions has left surveyors …
The further increase in mortgage rates to around 6% has left affordability particularly stretched in London. On top of the shift to remote working, which has allowed buyers to consider more affordable areas, that is likely to mean that buyer demand in …
10th July 2023
A fragile plateau The decline in the Halifax house price index in June was surprisingly modest given the scale of the increase in mortgage rates in the same month. But the current level of house prices looks unsustainably high given where mortgage rates …
7th July 2023
The shift to fixed mortgage rates and the rise in the number of homes owned outright means that while some borrowers face a sharp rise in mortgage payments other homeowners will sit out this interest rate cycle entirely. The most vulnerable group is …
6th July 2023
Construction slows as interest rates stay higher for longer and recession looms After two months of gains the headline CIPS construction PMI reversed course in May, dropping to a five-month low of 48.9, which indicated a contraction in activity. All …
We recently held a Drop-in titled “Industry’s decarbonisation challenge – From aviation to property”, which you can view on-demand here . This Update addresses some of the questions we received during the event, including those that we did not have time …
3rd July 2023
National index resilient, but regional data confirm affordability matters The pause in the fall in house prices extended into June according to Nationwide, but we think it is just a matter of time before the spike in mortgage rates in recent weeks causes …
30th June 2023
The Calm Before the Storm The tick up in mortgage approvals in May sustained the partial recovery from the slump at the beginning of the year. (See Chart 1.) But the increase reflects earlier declines in mortgage rates and will be cut short by their more …
29th June 2023
Higher mortgage rates have not only priced many buyers out of the market altogether, but also reduced the size of mortgage those still able to buy can take out. (See Chart 1.) The latest surge in mortgage rates to almost 6% means that, for the same …
28th June 2023
Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST . Register now . A return to mortgage rates of around 6% for the first time …
20th June 2023
Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST . Register now . Overview – As the UK’s recent problem of higher inflation …
19th June 2023
Borrowing curbed in response to rising interest rates With mortgage rates surging, the number of loans issued to buy a home dropped sharply in Q1, with Buy-to-Let (BTL) lending seeing the most severe drop. Those that did press ahead with a home purchase …
13th June 2023
Refinancing risks increase The recent upward revision to our mortgage rate forecast and the fact that the majority of those that need to refinance this year are on two-year fixes means that we are now more worried about the risk posed by refinancing. …
8th June 2023
Normalising supply could make future drop in demand more damaging The significant improvement in the RICS survey in May echoed the pause in house price falls in the past few months. But the survey also showed an increase in supply, which could …
Pause in May will give way to renewed falls ahead House prices were unchanged in May according to Halifax. Given that lack of momentum, the increase in mortgage rates following the bad inflation data published on the 24th of the month is set to tip house …
7th June 2023
The headline CIPS construction PMI increased for a second month in a row in May to 51.6, indicating a small rise in activity. But in line with last month there was a marked difference between the commercial and housing sectors, with the former rising to …
6th June 2023
The renewed decline in mortgage approvals in April will have dashed hopes that the jump in March marked the start of a recovery. Moreover, with mortgage rates now on their way back up, lending is likely to remain weak throughout the second half of the …
1st June 2023
House prices flattened off in May after a rise in April. But with mortgage rates now on their way back up we suspect that the stabilisation in prices over the last couple of months will soon give way to renewed falls. The -0.1% m/m fall in house prices in …
High net immigration helps explain why rental growth accelerated to its fastest pace on record last year. Immigration won’t be as high this year, adding to the reasons to think that rental growth has peaked. But strong pay growth, high mortgage rates and …
30th May 2023
The upward revision to our Bank Rate forecast suggests that mortgage rates will return to a similar peak as last autumn by the end of the year. That would undermine the recent pick-up in mortgage approvals and lead to renewed falls in house prices. Higher …
The increase in mortgage rates has been the main determinant of the size of house price falls in developed market economies. Very tight supply in the US, and to a lesser extent the UK, has also supported prices in those markets. Employment, incomes, …
25th May 2023
The larger than anticipated rebound in mortgage approvals in March and a slowdown (or even partial reversal) of house price falls suggested that the housing market downturn may have ended much earlier than we anticipated. The unwinding of some of the …
19th May 2023
The downturn in the housing market appears to have paused in many countries in recent weeks. However, we doubt that this marks the bottom of the market. With higher interest rates yet to take their full effect, and affordability generally still stretched, …
15th May 2023
Borrowing over a longer period significantly reduces monthly mortgage payments. So the accelerated shift towards loans with a term of 35 or 40 years rather than 25 has probably helped to mitigate the drag on buyer demand from higher interest rates. Higher …
Demand continues to slump In contrast to signs of a stabilisation in house prices and sales volumes in other indicators, the RICS survey remained downbeat in April. In particular, the renewed fall in the new buyer enquiries balance left it little higher …
11th May 2023
Prices slip in April, but remarkably resilient overall The small slip in the Halifax House Price index in April bought it a little more in line with the Nationwide figures. But prices remain remarkably resilient to the largest rise in mortgage rates since …
9th May 2023
Divergence opens up between housing and commercial construction The April CIPS Construction PMI showed a growing divergence between the housing and commercial sectors, with activity in the latter seeing a gradual recovery while the former declined to a …
5th May 2023
Recovery unlikely to continue The rise in mortgage approvals in March was stronger than consensus expectations, reflecting the reversal of the spike in mortgage rates since the autumn. However, we don’t think that mortgage rates can fall any further …
4th May 2023
House price falls pause in April The pause in house price falls in April suggested that the reversal of the autumn spike in mortgage rates has allowed prices to stabilise. But with affordability still very stretched by historical standards and the economy …
2nd May 2023
Alongside the publication of our Q2 UK Housing Outlook this week, we held a series of roundtable meetings for clients in London. Here we sum up our thoughts on three key questions which recurred throughout the day: What is the biggest risk to our …
28th April 2023
Overview – While house price declines have slowed and economic activity has proven more resilient than expected over the three months since our last Outlook , we are sticking to our forecast that house prices will fall by 12% in total. Persistent core …
26th April 2023
As mortgage lenders’ net interest margins are already very narrow, the increase in market interest rates over the past fortnight means that the decline in mortgage rates from their spike after the “mini” budget is now over. It was unusual for swap rates …
20th April 2023
Shift towards cheaper homes challenges statisticians The divergence between the Nationwide and Halifax House Price Indices (HPIs) of late has cast some doubt on the direction of house prices. A struggle to adjust the statistics for a shift towards cheaper …
17th April 2023
Mortgage demand still the limiting factor The headline mortgage availability balance of the credit conditions survey turned positive for the first time in over a year in Q1. The collapse of SVB while the survey was in the field probably helps explain why …
13th April 2023
Survey undermines hopes of a spring awakening The marginal improvement in the headline prices paid and new buyer enquiries balance of the RICS Residential Survey did not alter the overarching message that prices are falling and sales slumping. While the …
The Land Registry report that London house price growth slowed to 3.2% y/y in January and more timely data based on mortgage approvals show a 2.2% y/y fall in prices in Q1. The detail suggests that affordability is becoming the primary driver of pricing. …
6th April 2023
