Market commentary

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.

  1. 21 May 2013

    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.

  2. 19 April 2013

    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.

  3. 20 March 2013

    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.

  4. 20 February 2013

    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.

  5. 21 January 2013

    We are more positive about the UK housing market and wider economy than a year ago, despite economic headwinds and downside risks. A key reason is that lenders currently face few funding pressures, in part reflecting the funding for lending scheme. House purchase activity was robust in the fourth quarter, on the back of better mortgage availability and pricing, and we expect this to continue over the coming months.

  6. 20 December 2012

    Activity levels in 2012 have been better than we expected, despite a continuing weak economic backdrop. This reflects base period effects, as a relatively strong end to 2011 persisted into the early months of this year, and better than expected mortgage credit availability. The Funding for Lending Scheme (FLS) is likely to be a key factor influencing short-term market developments. Coming alongside wider improvements in funding conditions since mid-year, the FLS appears to be making an early positive contribution to mortgage pricing and credit availability. Our central view is that this will continue, and give rise to a discernible, although not dramatic, improvement in lending activity through 2013. The prospect of household real incomes stabilising, and then recovering slowly, should help to underpin housing and mortgage activity, by the time the stimulus from the FLS fades when drawdowns under the scheme cease from early 2014. Assuming that the jobs market continues to be relatively stable, and that lenders retain the flexibility to determine where forbearance is appropriate, we envisage arrears and possessions remaining close to current levels throughout the forecast period. While our central forecast is for a gentle underlying improvement in activity over the next two years, there are several key market risks and these are predominantly on the downside. The biggest concern continues to be that of a disorderly break-up of the Eurozone, although the possibility of this appears to have reduced somewhat over the past year. A tougher line from macro-prudential regulators on capital requirements could also dilute the positive effects that we expect to see from the FLS.

  7. 20 November 2012

    House purchase and remortgage activity both appear to have picked up recently, and this should be supported by an improvement in the availability and pricing of mortgages. The Funding for Lending Scheme is likely to have made an early positive impact, helping to counter some of the negative pressures associated with a protracted and weak economic recovery.

  8. 18 October 2012

    Recent reports of a sharp recovery in real incomes are unlikely to ring true for most households, for whom the scope for discretionary spending is still likely to be modest. The housing market has been fairly resilient, at subdued levels of activity, for some while. There have been signs of demand softening over recent months, but monthly patterns may have been distorted by the Olympics. House purchase demand failed to lift significantly in the third quarter, despite much better mortgage availability.

  9. 20 September 2012

    House purchase activity continues to be a little above year-earlier levels, but the housing numbers are by no means strong. We expect to see stronger take-up of NewBuy over the coming months, especially as the builders offer a more concerted approach to marketing. While not a panacea for all housing market problems, the funding for lending scheme does offer the potential to improve the lending environment. Unfortunately, it will be difficult to reach an initial assessment of its impact before year-end.

  10. 20 August 2012

    The UK economy contracted for the third consecutive quarter in Q2 - a larger fall than expected. In light of this market commentators have revised down their forecasts for growth this year. The key housing market indicators appear to show a further softening in the market in the last month. However, we are still seeing distortions from one-off factors and we look forward to September when these should largely have worked their way through.

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