Market Commentary is our monthly analysis on the UK mortgage markets, released on the same day as our gross advances press release. Below is a listing of our most recent commentarys.
We do not expect the Bank to move quickly to raise interest rates, once the UK passes the 7% unemployment threshold
Housing activity is set to strengthen further in the short-term, and to contribute materially to overall economic growth
The launch of the government’s Help to Buy mortgage guarantee scheme takes place against a recovering housing market and economy
It is too soon to gauge how much extra housing and mortgage demand the new scheme will stimulate
Regulators appear unperturbed about current housing market developments, but are monitoring closely, in case risks to financial stability surface
Prospects for the UK economy continue to brighten, although there is a risk that expectations are running too high.
The housing market is in the early stages of what appears to be a relatively benign and broad-based recovery.
With little pick-up in net lending to individuals, talk of housing booms is premature, and speaks more about housing supply shortfalls than the current strength of demand.
An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture starting to emerge in the economy also.
Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.
The signals from the Bank of England about its likely response to an improving economic picture give somewhat greater confidence as to the likely path of future interest rates, although with the built in get-outs and caveats this path remains far from certain.
The Bank of England has given its clearest signal to date that higher interest rates remain a long way off.
Improvements in the cost and availability of mortgage credit are underpinning a meaningful recovery in the housing market. In recent months, we have seen the strongest performance for mortgage lending since 2008.
Favourable conditions in the housing and mortgage markets look set to continue for some while.
The imminent change of guard at the Bank of England takes place against the backdrop of a modestly improving UK economy, albeit one that appears to rest upon a pick-up in consumer spending and a recovering housing market.
Funding conditions, helped by the funding for lending scheme, continue to look favourable and are supporting more competitive mortgage pricing and availability and a gradual resumption of lenders’ risk appetite.
Our forward estimate of gross mortgage lending in May resonates with other survey evidence of strengthening house purchase activity. It also suggests that the long-term contraction in remortgage activity may be drawing to a close.
The focus of recent changes to the funding for lending scheme is on lending to smaller businesses, but the time extension should reassure firms that they can enjoy access to funding on reasonably favourable terms through to early 2015.
Stronger house purchase lending continues to underpin mortgage lending more generally, but the underlying picture overall is one of reasonable rather than dramatic recovery.
House purchase activity has remained relatively positive over recent months, particularly for first-time buyers.
We continue to see better availability of mortgage credit, greater competition and narrowing mortgage spreads.
The recently announced Help to Buy mortgage guarantee scheme is still embryonic in nature; its significant firepower offers the potential to improve activity but not until 2014.
With the Chancellor facing limited room for fiscal manoeuvre, he may see changes in the monetary framework as helpful to supporting UK economic growth.
The recent picture of relatively strong house purchase numbers and subdued remortgage activity continues.
The funding for lending scheme appears to be helping support modestly higher first-time buyer activity.
Housing sentiment remains positive, despite ongoing economic pressures. Higher and more persistent inflationary pressures represent a greater headwind, but we still expect the funding for lending scheme to lift activity over coming months. House purchase activity was robust into the start of 2013, on the back of better mortgage availability and pricing, and we share the Bank’s confidence that this will continue over the coming months.
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