Weekly Summary: 12th February 2021

DATA: ONS reported GDP for the whole of 2020 was 9.9% lower than 2019

Meanwhile, monthly GDP data shows the economy in December was 6.5% smaller than 12 months ago though both these figures are likely to be revised in the future.

DATA: MoJ reported Q4 2020 mortgage & landlord possessions data

Mortgage possession workload remains very low but there was a slight increase in landlord possession actions, albeit still at much lower levels than normal.

DATA: UK Finance reported Q4 2020 mortgage arrears and possessions

Mortgage arrears (over 2.5% of balance) increased in Q4 with owner occupier arrears 9% higher than one year ago and BTL arrears 33% higher. Arrears as a % of outstanding mortgages are rising but still well below the rates seen in previous housing crashes.

DATA: Zoopla reported an 8.3% annual fall in London rents in Q4 2020

UK rents excluding London rose 2.3% in 2020. Zoopla reported rental falls in some large cities but rising rents in their suburbs due to the “race for space”.

REPORT: RICS release January 2021 residential market survey

They report: “Sales market activity softens over the month amid third national lockdown.”

REPORT: FCA release Financial Lives 2020 survey

The report summarising their Feb 2020 survey and Oct panel survey provides a useful and concerning look at consumers’ financial situation before and during the pandemic.

REPORT: Policy Exchange release report on demand side policies

The report suggests better demand side policies are required and “there needs to be a shift away from direct interventions such as help to buy or temporary freezes in stamp duty.”

POLICY: Housing Secretary hopes to “bring an end to unsafe cladding with multi-billion pound intervention”

Unfortunately, the plan only tackles unsafe cladding and ignores other building safety issues, leaves many leaseholds with homes in negative equity, and fails to recognise the government’s role in the regulatory failure that led to this terrible situation.

POLICY: MHCLG publish evaluation of Voluntary Right to Buy pilot

The report estimated the national propensity to buy was 6.3% which would equate to around 16,000 tenants if there was no ballot process to constrain demand.

NEWS: Homes England extend Help to Buy equity loan deadline

The new deadline for completion is the 31st May (previously 31st March).

Chart of the Week

The number of outstanding owner occupier mortgages has fallen to a level last seen in 1988/89. The Chart of the Week opposite highlights the decline in mortgaged owner occupation since the early 2000s. The decline had slowed in recent years and there was a small rise in 2019 but this has been undone by a larger fall in 2020. Meanwhile, the total number of outstanding mortgages is around 1999 levels thanks to an increase in BTL mortgages. This could mark the low point in owner occupier mortgage numbers if first time buyer numbers continue at recent levels.