Market Commentary – October 2022

Sunak Saves The Day

But It’s Still Looking Scary

High Loan-to-Income Lending

The mini-budget shock may have eased with Truss’ departure but a housing market downturn is still a very likely prospect. At the beginning of September, when mortgage rates were just hitting 4%, we warned the housing market was getting scary. In the aftermath of the mini-budget we said it was terrifying. Given recent events, we’ve downgraded it back to scary – but the fallout could still be severe for households, the market, and the economy.

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Market Commentary – September 2022

Truss Turned It Terrifying

Price Falls & Negative Equity

Long Lasting Impact

Last month we wrote this is getting scary. Since last week’s mini-budget, it has turned terrifying. There is still a great deal of uncertainty about the future and a housing market downturn is not guaranteed. However, the events of the last week have accelerated the market towards what was its worst case scenario and the opportunities to avoid it are reducing. Even a full reversal would leave a long lasting impact on the mortgage and housing markets.

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Market Commentary – August 2022

This Is Getting Scary

Regional Repayments

Rental Squeeze

The housing market is still booming but time is running out. The cost of living crisis is squeezing finances, interest rates are increasing, rents are rising, consumer confidence is collapsing, and climate change is causing havoc across the globe. This is getting very scary. While the housing market may be supported by a last rush to lock in low rates, these multiple headwinds will begin to hit market activity and probably house prices in coming months.

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Market Commentary – July 2022

Signs of Stress

The Turning Point

House prices are still booming but the rising cost of living and increasing interest rates are starting to hurt. The market is still benefiting from the boom in buyers and a lack of stock but there are some potential signs of stress starting to appear. While the cost of living crisis is hurting those at the lower end of the income distribution most and rising rates will hit potential buyers rather than existing owners, the squeeze is only going to increase in coming months. The autumn could mark the turning point for the housing market.

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Market Commentary – June 2022

Stuck In The Corner

Rapidly Rising Rates & Still Not So Special

Once Every Ten Years

The housing market is still booming despite higher mortgage rates and the rising cost of living. However, the risks of a slowdown are increasing but the impact of higher mortgage rates will depend on what happens to loan-to-income ratios. It’s not just the UK housing market that is facing these challenges, with other high growth markets facing higher rates and slowing prices. Meanwhile, interpreting the 2021 Census is a challenge given its timing.

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Market Commentary – April 2022

The Next Crash & Rational Exuberance

Interest Rates, Energy Costs, & Policy Mistakes

House Prices & Turnover

The housing market may still be booming but risks are rising. There are increasing warnings about a recession while some forecasters are downgrading their predictions for house price growth next year. A crash is still far from guaranteed but it is worth considering what the next market downturn could look like. At the very least to explore what could be done to alleviate the challenges and issues it creates for the housing market and wider economy.

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Market Commentary – March 2022

Record Low Rates, Record High Prices

Cost of Living & Housing Market Downturns

Regional Transactions

Every week brings new reports of record high house prices despite the soaring cost of living as mortgage rates remain low – for the moment. While last year’s Spring Budget all but guaranteed that 2021 would end with a housing boom, this year’s Spring Statement brought no guarantees for the housing market. However, the lack of support for households in the face of the soaring cost of living is likely to further reinforce the inequalities in the housing market. Renters will struggle most and the threat of a future housing market downturn has increased.

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Market Commentary – February 2022

Rising Prices & Russian Buyers

Supply, Demand, & Mortgage Rates

There are more important issues facing the world than what is happening in the UK’s housing market. It can be difficult to focus on topics like housing in the face of the constant news stream from the horrific war in Ukraine but there is little we can add to that debate. Therefore, we will stick to what we know best by continuing to look at recent trends in the housing market while highlighting some potential impacts that the war might have.

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Market Commentary – 2021 Review

Transaction Taxes & A Tax Cut For The Top End

The Credit Crunch & Levelling Up House Prices

Supply Squeeze & Looking Ahead

The housing market in 2021 was full of stamp duty deadlines, soaring transactions, and rampant house price growth. The top end of the housing market boomed while first time buyers struggled thanks to a credit crunch and renewed interest from buy-to-let investors and second home owners. The housing market now faces a supply squeeze with a lack of homes available for sale while the threat of rising interest rates looms large. This note provides a brief review of the housing market in 2021 and looks ahead to what might happen next.

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