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Monthly economic roundup

07-Oct-2014

Welcome to our September monthly economic round up, featuring the latest market insights and all the relevant financial and economic information we think may be of interest. You can find the market analysis just for you in one handy place, follow the links below.

UK and Ireland Housing Markets

Contents

UK House Price Indices
UK Regional House Prices Comparison
UK Mortgage Approvals & Sales Volume
UK Market Sentiment – RICS Housing Market Survey
UK House Prices Forecast

UK House Price Indices

Land Registry’s house price index increased by +0.99% in August, compared to a +0.81% increase from Nationwide and a +0.12% increase from Halifax. Nationwide’s most recent release for September shows a decrease of -0.16%, lower than a survey conducted by Bloomberg that predicted an increase of +0.5%. Nationwide said there have been tentative signs from surveyors and estate agents that buyer demand may be starting to moderate, but the low level of interest rates and strong labour market suggest that underlying demand is likely to remain robust.

The national average asking prices recorded by Rightmove increased by +0.94% in September. Rightmove recorded a +0.90% increase in average asking prices in London (London average of £557.8k vs. national average of £264.9k).

 

Last release

Most recent

YoY

Dec 13 to date

Peak Month

Peak to now

Peak to Trough

Halifax

Aug-14 0.12% 9.44% 7.26% Aug-07 -6.67% -22.51%

Nationwide SA

Sep-14 -0.16% 9.49% 5.90% Aug-14 -0.16% -20.24%

Lreg

Aug-14 0.99% 8.35% 6.89% Nov-07 -1.96% -17.15%

Rightmove

Sep-14 0.94% 7.91% 9.67% Jun-14 -2.71% -21.53%

DCLG SA

Jul-14 2.68% 11.68% 9.60% Jul-14 0.00% -23.77%

AcadHPI

Aug-14 0.91% 10.65% 7.75% Aug-14 0.00% -23.85%
 
graph-1-economic-round-up-aug-2014

Sources: Bloomberg, Land Registry, Acadametrics

UK Regional House Prices Comparison

According to Land Registry’s figures in August, house prices in London increased the most, by +2.66%; whereas those in South West increased the least, rising by +0.09%. House prices in London have continued to reach new highs in August.  Outside London the South East and East Anglia are the only regions to have regained its 2007 peaks.

 

Last release

Most recent

YoY

Oct-07 to date

East Anglia

Aug-14 1.48% 10.63% 1.52%

East Midlands

Aug-14 0.74% 5.95% -9.67%

London

Aug-14 2.66% 21.61% 34.73%

North East

Aug-14 0.60% 2.97% -21.74%

North West

Aug-14 0.12% 4.24% -16.88%

South East

Aug-14 1.68% 11.59% 5.67%

South West

Aug-14 0.09% 5.75% -5.04%

Wales

Aug-14 0.37% 3.39% -14.60%

West Midlands

Aug-14 0.16% 4.43% -10.92%

Yorks and Humber

Aug-14 1.58% 3.98% -15.21%
 
graph-2-economic-round-up-aug-2014

Note: Figures taken from Land Registry’s regional house prices development for England & Wales. Index re-based to 100 at October 2007.
Source: Land Registry

UK Mortgage Approvals & Sales Volume

Mortgage approvals decreased by -2.86% to 64,212 in August, in slightly lower than a consensus forecast of 65,000 by economists surveyed by Bloomberg. Sales volume data provided by Land Registry is at a lag and the most recently released data is from June, recording a MoM decrease of -2.73%.

 

Land Reg Sales Volume

BoE Mortgage Approvals

Last Release

Jun-14 Aug-14

Sales Volume

73,158 64,212

MoM % Change

-2.7% -2.9%

YoY % Change

10.6% 0.9%

Peak Month

May-02 Nov-03

Peak Volume

135,543 133,593

Peak to Now % Change

-46.0% -51.9%

Peak to Trough % Change

-80.6% -80.1%
 
graph-3-economic-round-up-aug-2014

Sources: Land Registry, Bloomberg

UK Market Sentiment – RICS Housing Market Survey

The Housing Market Survey, provided by the Royal Institute of Chartered Surveyors, provides an indication of market sentiment. This sentiment measure decreased to 40 in August from 48 in July.

The figure represents the proportion of surveyors reporting a rise in price minus those reporting a fall (i.e. if 30% reported a rise and 5% reported a fall, the unadjusted balance will be 25%).

graph-4-economic-round-up-aug-2014

Note: Balance = proportion of surveyors reporting a rise in prices minus those reporting a fall.
Source: Bloomberg

UK House Prices Forecast

The Centre for Economics and Business Research (CEBR) forecasted UK house prices to increase 13.75% by 2017. CEBR’s and other providers’ predictions on house prices between 2014 to 2018 are:

Provider

Date of Forecast

2014

2015

2016

2017
Savills Feb-13 1.50% 2.00% 3.50% 3.50%
Knight Frank Dec-13 7.00% 5.00% 4.00% 3.00%
OBR Dec-13 5.20% 7.20% 4.80% 3.70%
Hometrack Apr-13 2.00% 3.00% 4.00% 4.00%
CEBR Apr-13 2.25% 3.00% 4.00% 4.50%

Source: Savills, Knight Frank, Office for Budget Responsibility, Hometrack, Centre For Economics and Business Research

 

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