Daily Management Review

Brexit knocked down the UK mortgage market


09/15/2016


Volume of mortgage lending in the UK by the end of July decreased by 12% compared to the same period last year. This is evidenced by the UK Council of Mortgage Bankers (CML).



nyphotographic.com
nyphotographic.com
Volume of mortgage loans in July amounted to only 10.6 billion pounds ($ 14 billion), up 13% compared with June. There were 58.1 thousand of loans issued for purchase of housing in total in July.

CML experts believe that it is too early to draw any conclusions on whether the decline in July was a temporary response to the Brexit decision, or it is beginning of a slowdown in the housing market.

Volume of loans issued for purchase of housing for those who already owns one residential property fell in July by 21% yoy to 3 billion pounds. This is linked to the fact that the country has earlier introduced an additional stamp duty on purchase of houses for this category of citizens in the amount of 3% of project cost.

The housing market in London is overwhelmed by expectations of low capital inflows, while elite real estate market has suffered from an increase in taxes on sales and oversupply.

This month, sales of London property are longer than usual, despite the decline in prices due to economic uncertainty, which is formed around the decision to leave from the EU.

Nevertheless, the lull will not last long. In 2018, property prices in London will increase by 2%, as the economic situation will somewhat improve. 

Experts predict that cost of real estate will grow by 4% in 2018 across the country. By the beginning of this year, prices on the market fell by 15% compared to the peak in 2014.

Housing prices in the UK have been falling in August for the second consecutive month. High prices have a negative impact on demand by reducing the sales activity, Halifax Bank analysts said.

In July, prices fell by 1.1%, in August - by 0.2%. For the three months through August, prices rose by 0.7% compared to 2014. This is the slowest quarterly growth rate. Compared with the same period a year earlier, prices rose on average by 4.1% to 213930 pounds, despite the fact that for three months, annual rate of price growth has slowed down to lows in 2013.

"Growth in prices of housing has been a trend of the past few months. Further, we can see reduction of annual and quarterly growth rates", - said Martin Ellis, economist at Halifax.

Growth in housing prices should limit demand and stop the rapid rise in prices, he said.

"We do not expect activity in the housing market in the coming months. The prices are now under pressure from the uncertainty affecting the economy, consumer confidence and their willingness to participate in major transactions. Once Britain formally launches the procedure of exit from the EU, we suspect that the situation will worsen", - said Howard Archer, chief economist at IHS Global Insight in London. 

source: bbc.com, marketwatch.com






Science & Technology

Retailers Could Transform The Market Scenario Into Smart Shopping Experience For The Consumers With The Cloud

A Way To Unlock Wannacry Without Ransom Found By French Researchers

China to introduce face recognition payment system

Clues To Ransomware Worm's Lingering Risks Found By Security Experts

Nasdaq Brings ‘Analytics Hub’ To Provide Enhanced Trading Experience

Through XFi Launch, Comcast Moves Closer To Home Connectivity

Is SWIFT really safe?

Uber To Take The Skies To Fly Its Cars

Virtual reality market reaches point of disillusion

Newly Developed ‘Artificial Photosynthesis’ Device Converts CO2 Into Car Fuel

World Politics

World & Politics

Seven best tourist destinations in Europe

Germany and France set up to stabilize the eurozone

Greek parliament adopts new austerity measures

Academic Says, Trump's Downfall Is Kept At Bay By White Identity Politics

Germany Will Not Sign Any Statement On ‘China's Belt and Road Forum’ Without Equal Rights On Free Trade

The Fear Of Renewed Large-Scale Cyber ‘Ransomeware Threat’ On Monday Grip The World

ASEAN's Next 50 Years Could Be Shaped By These Three Ideas

US to expand the airline electronics ban