Weekly Summary: 15th January 2021

DATA: ONS report 2.6% monthly fall in GDP during November lockdown

The fall in GDP during lockdown was inevitable but wasn’t as large as many had expected. The data will be revised in the future but shows the economy is 8.9% smaller than last year.

DATA: MHCLG report V-shaped recovery in Q3 housebuilding data

The data confirmed the housebuilding recovery already seen in the weekly Energy Performance Certificate data with new build completions just 1.1% lower than Q3 2019. This data is still less comprehensive than other sources so should not be used as an absolute measure of housebuilding activity.

DATA: RICS December Residential Market Survey reports “Sales market activity indicators remain positive albeit momentum continues to ease”

The report showed enquiries, instructions, and sales agreed were all positive though lower than seen in recent months. The London rental market continues to see negative tenant demand and negative rent expectations.

POLICY: FCA proposes extension of repossession ban to end of March

The existing guidance means firms should not enforce a mortgage repossession before the end of January. They now “propose extending this guidance so that firms should not enforce repossessions before 1 April 2021” due to the ongoing pandemic.

REPORT: JRF release UK Poverty 2020/21 annual report

The report “shows too many of us entered the pandemic already at risk of being cast adrift into poverty, while often lacking secure housing, a reliable income or adequate support”. Unfortunately, it also “shows that those of us already struggling to keep our heads above water have often been hit the hardest”.

REPORT: ESCOE on “Estimating the UK population during the pandemic”

The report highlights the challenges faced by ONS when trying to assess the impact of the pandemic on the UK’s population. Using “crude and illustrative” estimates, the report suggests the population may have fallen by 1.3 million people over the year. It also shows the impact has been greatest in London with large falls in non UK-born residents. Many of these people will have lived in the private rented sector and the findings appear consistent with the ongoing collapse in London rental demand and rents (e.g. see RICS above).

REPORT: Lichfields reverse engineer MHCLG’s top 20 cities

The blog looks at how the list of top 20 cities was derived for applying the 35% uplift to the Standard Method of calculating housing need and the issues with this approach.

Chart of the Week

Data from MoneyFacts in the chart below shows the scale of the mortgage credit crunch since the pandemic began. In March 2020 there were 779 fixed and variable rate mortgages available at 90% loan-to-value (LTV). This collapsed to just 70 in July. The latest data shows the number of available 90% LTV products has increased to 160 in 2021 but this is still 79% fewer than prior to the pandemic and the average rate is also much higher.