Property Market Monitor: November 2020

Slowdown? What slowdown? UK annual house price growth reached a 5-year high in October. As illustrated in our chart of the month, average UK house prices grew by 5.8% year-on-year in October, the largest annual growth since January 2015. Despite signs suggesting that the economic recovery has lost momentum in recent months, the housing market activity has remained robust. According to Nationwide, mortgage approvals for house purchase climbed to 91,500 in September – the highest level since 2007. But according to Robert Gardner, Nationwide’s Chief Economist, “the outlook remains highly uncertain and will depend heavily on how the pandemic and the measures to contain it evolve as well as the efficacy of policy measures implemented to limit the damage to the wider economy”.

Chart of the month: Monthly UK house price, annual % change

Source: Nationwide House Price Index, Blend Network

Market Commentary

  • Annual house price growth rose to 5.8% in October, the highest rate since January 2015. This comes after several months of surprisingly strong housing market performance – September saw the strongest annual house price growth in four years.
  • Despite the strength, a look at monthly price activity suggests the recent momentum may be running out of steam. UK house prices rose 0.8% month-on-month in October after taking account of seasonal effects, following a 0.9% monthly rise in September and down from 2% month-on-month increase in August and 1.7% in July. UK house prices are up by 2.9% year-to-date during the first 10 months of the year compared to the same period last year, but some high-frequency indicators suggest a slowdown.
  • However, according to Robert Gardner, Nationwide’s Chief Economist, activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March. Labour market conditions have already weakened with the unemployment rate rising.

Figure 1: UK housing market indicators

Our underwriting team at Blend Network remains very busy assessing deals to ensure we continue lending to experienced property developers who come to us with a solid project, an enviable track record and a strong exit strategy. Keep an eye for new loans coming at www.blendnetwork.com.

 

 

Your capital is at risk if you lend to businesses. P2P lending is not covered by the Financial Services Compensation Scheme. Investments are illiquid (the inability to sell assets quickly or without substantial loss in value). Past performance is not a reliable indicator of future results.

Blend Loan Network Limited is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (FRN. 574048)

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