Our markets

Our markets

The housing market plays an important role in the UK economy with underlying demand for housing being fundamentally strong.

MORTGATE APPROVALS

Mortgage approvals are a key indicators of the level of activity in the housing market. These remain significantly below 2007 levels but show increasing growth during the calendar year 2013.

Seasonally adjusted figures peaked in January 2014 before falling back slightly from 76,000 approvals per month in January 2014 to 62,000 per month in May.

THE MORTGAGE MARKET REVIEW (MMR)

Following the Government review of the mortgage market in 2009, these key features of the reforms came into effect on 26 April 2014:

HOUSING SUPPLY

NHBC new build starts increased by 17% in the year to June 2014 compared to the previous year to 116,500. Starts in the quarter to June 2014 were 32,600, the highest quarter for some considerable time. This reflects the industry response to increased levels of confidence in the UK economy and the success of the Government initiatives such as Help to Buy which are making home ownership more accessible.

RESIDENTIAL TRANSACTIONS

Residential transactions in England and Wales increased by c.15% in the calendar year 2013 compared to 2012 to 969,000. This gained momentum in 2013 building on the c.5.5% increase in 2012.

HELP TO BUY CHANGES

The Help to Buy Mortgage Guarantee, introduced in October 2013, offers mortgage lenders the opportunity to purchase a Government guarantee on mortgages where a borrower has a deposit of between 5% and 20%. As a consequence of this support, lenders taking part are able to offer homebuyers higher loan to value mortgages.

In January 2014 the Government announced the extension of its Help to Buy loan scheme up to March 2020 with a further £6bn of funding.

PLANNING

The National Policy Planning Framework (NPPF) was published in March 2012 as part of the Government’s action to ensure the supply of housing in response to higher demand. An update in the Autumn Statement highlighted that the approval rate for planning applications was at a 13 year high.