Filtered by Subscriptions: UK Housing Use setting UK Housing
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
Surprise rise suggests market could shrug off end of stamp duty holiday The unexpected rise in the Nationwide house price index in February adds to the growing pile of evidence that the stamp duty holiday is just one of several reasons behind the recent …
2nd March 2021
Lending remained strong as buyers hoped to elude stamp duty Mortgage approvals remained at very high levels in January as buyers hoped to take advantage of the stamp duty holiday. But there are growing signs that demand may be resilient to the end of the …
1st March 2021
A three-month extension to the stamp duty holiday should prevent sales falling in Q2 even if it does not incentivise much new activity given ongoing delays in conveyancing. And the timeliest data suggests that buyer demand may prove resilient when the tax …
24th February 2021
Mortgage arrears have remained very low, casting doubt on our view that we will see a substantial rise in forced selling later this year. But new evidence from the Resolution Foundation shows that policy support remains crucial to households keeping up …
23rd February 2021
There are clear signs that the end of the stamp duty holiday is causing the housing market to slow. In January the RICS reported a sharp drop in new buyer enquiries and seller instructions, and house prices edged down for the first time since last summer. …
16th February 2021
Housing market cooling sharply The January RICS survey suggests that the housing market has embarked on the next leg of its journey through the pandemic. The lockdown and the looming end of the stamp duty holiday have caused a sharp drop in buyer demand …
11th February 2021
The availability of high loan-to-value mortgages has dropped sharply, and the cost of those that are still available has rocketed. So it’s remarkable that the share of mortgage advances going to first-time buyers hasn’t dropped. We put it down to the …
10th February 2021
Our analysis suggests that the apparent sudden drop in the population of the UK last year has led to a huge rise in vacancy rates in the London and Midlands rental markets. House prices in those regions are also most at risk, both from the direct …
8th February 2021
House prices start to slip The drop in the Halifax house price index in January confirmed that the turn of the year coincided with a change of momentum in house prices. We expect house prices to continue to drop back over the course of 2021 as the stamp …
5th February 2021
In our Future of Property research, we identified important post-pandemic shifts in most real estate sectors. How these trends interact will be key to the outlook for the urban locations where most real estate is clustered. We think it is premature to …
4th February 2021
Star performance starts to fade The construction industry outperformed the rest of the economy in 2020 by being the first and only sector to see output recover to its pre-virus level. But the unexpected dip in the construction PMI in January suggests that …
First drop in prices since June is a sign of things to come The small drop in Nationwide house prices in January, the first since June last year, is an early sign of the reversal in the 2020 house price surge we expect to see this year as the stamp duty …
2nd February 2021
Lenders make up for lost time in late 2020 The strongest December since 2006 took total mortgage approvals in 2020 above their 2019 level. We still think that approvals will slump when the stamp duty holiday ends, but there are some tentative signs the …
1st February 2021
Overview – Rising unemployment and the withdrawal of the raft of policies that supported the housing market in 2020 means that the pandemic will finally take its toll this year. The end of the stamp duty holiday will cause transactions to slump at the …
27th January 2021
Strong demand allows banks to maintain stringent lending standards Very strong demand allowed banks to maintain tight lending standards in Q4 2020 while still increasing mortgage lending volumes. Of course, buyer demand is likely to drop sharply when the …
21st January 2021
Overview – Our view that the economy will return to its pre-pandemic size in Q1 2022 and that it won’t be permanently smaller due to the pandemic is a more optimistic take than that of most forecasters. It implies that the government doesn’t need to …
19th January 2021
Completions of new homes have made a full recovery from their collapse in Q2 2020, but builders appear more hesitant to start new projects. Given we expect the housing market to endure a rough patch later this year, that is unlikely to change anytime …
18th January 2021
Waning momentum leads surveyors to expect a drop in prices Sales and prices rose further in December, but there were clear signs that momentum was waning even before the new lockdown was imposed. Indeed, with the end of the stamp duty holiday looming, …
14th January 2021
The latest lockdown will keep rental demand in London very weak and prolong the drop in rents there. There is no doubt that they will recover in the summer if vaccines are successful and the virus restrictions are eased, but we think that some of the …
13th January 2021
Government reform of leasehold will reduce payments from leaseholders to freehold landlords a lot in some instances. In this Update, we provide two examples of how the changes will affect “enfranchisement premia” – the cost of buying the freehold or …
11th January 2021
The year the housing market ignored the economy 2020 may well have been the strangest year for the housing market since the Halifax house price index began in 1983. Despite the biggest drop in GDP since 1709, house prices rose by 7% y/y in Q4, the largest …
8th January 2021
Construction continues to recover…for now The seventh consecutive construction PMI reading of over 50 in December mainly reflected a continued strong recovery in housing activity. The rebound in construction of commercial property has already all but …
7th January 2021
The government’s plan to end the furlough scheme and the stamp duty holiday in the spring sets the housing market up for a hangover from the surge in prices in 2020. As a result, we are more downbeat on the prospects for house prices in 2021 than most …
5th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
Surge in lending to pre-financial crisis levels will be fleeting The increase in mortgage approvals for house purchase to over 100,000 for the first time since August 2007 underlines the remarkable strength of housing market activity. If moving house …
4th January 2021
After falling in May and June, house prices shrugged off the collapse in GDP and the decline in employment to surge in the second half of the year. (See Chart 1.) As a result, annual house price growth in Q4 is on track to be just over 6%, the strongest …
18th December 2020
Given a tightening in credit conditions, the Financial Policy Committee (FPC) is probably right to be unconcerned by the recent surge in mortgage lending. In fact, the Committee is preparing to loosen its mortgage lending guardrails, which may allow …
14th December 2020
Surveyors report that activity peaked in November After mortgage approvals hit a 13-year high in October, surveyors reported that sales rose yet further in November to what they expect to be the high-water mark. With the outlook for employment shaky and …
10th December 2020
The increase in working from home that appears to have led buyers to put less emphasis on location and more on space has not undermined London house prices. As of September, house price growth in the capital of 4.1% y/y was only marginally below that in …
9th December 2020
Surge in mortgage advances comes despite reduction in riskier lending The surge in mortgage lending to its highest level since before the financial crisis has come despite banks curbing riskier loans. If we are right to think that house prices will dip, …
8th December 2020
House prices continue to rise strongly, but for how much longer? There was no sign whatsoever of the surge in house prices abating in November as annual growth in the Halifax index rose to a fresh four-year high. Tight market dynamics suggest that prices …
7th December 2020
