Is the Housing Market built on sand?.

By Mark Davies

Financial Services

House prices reached a record high in August and in September annual house price growth was 5% according to Nationwide. These gains more than cancelled out the Covid19 losses seen in May and June.

Housing market activity has recovered strongly in recent months. Mortgage approvals for house purchase rose from c66,000 in July to almost 85,000 in August – the highest since 2007, well above the monthly average of 66,000 prevailing in 2019.” said Robert Gardner, Chief Economist at Nationwide.

 

The rise in activity comes from:

  • Pent-up demand now progressing, which had slowed due to the first lockdown,
  • The stamp duty holiday bringing house purchases forward. House buyers are taking advantage of the suspension which finishes in March 2021,
  • And the start of a shift in where people want to live and how they want to live following lockdown. In Nationwide’s survey, more than 40% of Londoners are considering moving as a result of Covid19.

 

But there are also a large number of significant challenges, with a number of market dampeners. The spectre on the horizon are:

  • Rising unemployment as a result of the pandemic,
  • The reduction in generosity of government support schemes,
  • The looming presence of a second Covid19 spike,
  • The limited number of low-deposit mortgages available and signs that some lenders are tightening their lending criteria.

 

All of this means that mortgage lenders and brokers have never been busier or more uncertain. They are talking to us about supporting them with Advisors, QA and Team Leaders on both a permanent and contract basis.

 

If you would like to discuss this further please fee free to contact us contact us.