Positive UK Housing Market
Housebuilding is an industry which at present continues to do well with various housebuilders reporting excellent results, the governments ‘help-to-buy’ scheme is a major contributing factor to this.
We have a situation at present where we have strong competion between mortgage lenders and mortgage rates are at all time lows, indications are that this will continue well into 2017. There has been negative spin put out recently by the likes of George Osborne (Chancellor) and Mark Carney (Governor of BoE) that if the EU referendum result was to ‘Leave’, then we may well see interest rates predictions change.
There are dominant risks for the industry which will revolve around the market response to rising interest rates, with many predicting that highly leveraged markets such as London would be hit hardest by any significant rise. Such a rise in interest rates would have a major impact on mortgage payments, the effect this would have on borrowers should not be underestimated, the property market could well turn sour very quickly if this happens.
For the moment the interest in creating more homes especially in London is the pursuit of the government and the recently elected Mayor of London Sadiq Khan who has already voiced his intentions to reallocate land for development.
One of the biggest firms in the industry Taylor Wimpey has announced that it sees a ‘very positive’ housing market in the UK, with healthy confidence and demand
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