Your mid-week update
Mortgage approvals and manufacturing hint at recovery
2 minutes to read
Tracking the housing market recovery
Mortgage approvals for house purchase soared 66% to 66,300 in July compared to a month earlier, according to the Bank of England. That puts them just 10% below February's peak and broadly in-line with the long-term average. This result comes as the average cost of fixed rate mortgages at 85% and 90% loan-to-value have risen markedly since February, according to Knight Frank Finance.
It's clear from the strength of the recovery that the cut to stamp duty is working as intended and there has been a notable uptick in first time buyers as the cut at least partially offsets requirements for larger deposits, says Simon Gammon.
Country homes market outperforms
The residential sales market in the country continues to lead the recovery. Exchanges outside London were up 60% in the week ending 29 August versus the five-year average, as offers translate into transactions.
In the latest agent's diary, Chris Druce also finds the lower end of the property ladder is becoming increasingly active, which is enabling property chains to come back together.
Lettings market mini-surge
In this week's Residential Market Outlook, Tom Bill unpicks the lettings market. In the week ending 22 August, the number of viewings in London and the Home Counties hit a ten-year high.
The surge is at least partly down to uncertainty around the start of the academic year as many universities had provided the option of online learning until Christmas. That meant some students held out until late August before deciding what to do.
Elsewhere, tenants have been taking advantage of falling rents, with many seeking more outdoor space.
Global manufacturing on the march
The UK's purchasing managers’ index for manufacturing rose to 55.2 in August, from July’s figure of 53.3. That's the fastest pace of growth since May 2014. New orders rose at their fastest pace since November 2017.
We're now seeing similar scenes in the US, where manufacturing activity accelerated to a nearly two-year high in August amid a surge in new orders. The reading from the Institute for Supply Management highest level since November 2018.
Still, there are signs European manufacturers are trying to save money wherever possible to be prepared for another shock.
In other news...
In this week’s Rural Update, Andrew Shirley questions why more landowners don’t want to get paid to help the environment, questions the government for the results of its new environmental land management scheme proposals and wonders if we really will get a Brexit trade deal with the EU.
Finally UK retailers step up their discounting in August; an uneven recovery is under way in China; the UK to ramp up return-to-workplace campaign; and Germany expects the blow from the virus crisis to be less severe than feared.