Twindig Housing Market Index (HMI) 2 April 22
In the week where the Nationwide House Price Index hit another high and house price inflation reached its highest rate since November 2004, the Twindig Housing Market Index nudged up by 1.4% to 79.6.
In our view, the pace of house price inflation is quite astounding and house prices, for now, appear to be defying gravity, but how long can this last in the face of increases in costs of living and rising mortgage rates? Post lockdown savings remain high for many and employment prospects are robust, so the housing market may not run out of steam for a while yet.
National housebuilder Bellway published its first-half results this week reporting revenue growth and margin improvement and the outlook was strong. Bellway's forward orderbook is up 24% in terms of volume of homes and up 34% by value to £2.2bn, within an average price of £305,000. Bellway is in a strong position now and looks likely to be in a stronger position in the future. Taking Bellway as a proxy for the overall housing market suggests that its future is a bright one.
However, mortgage approvals dipped by 3.9% in February to around 71,000, but this remains comfortable (7.5% or almost 5,000 mortgages) ahead of the 10 year average of 66,000, so no cause for concern just yet.