Twindig housing Market Index (HMI) - 3 Sep 2022

In the week that saw mortgage approvals tick up and house prices rise for the 13th month in a row, unluckily for the residential housing market the Twindig Housing Market Index fell by 2.8% to 72.3 this week as tory leadership race fatigue hit new highs, or perhaps it was just a tough first week back at school after the summer holidays.

Bank of England data revealed that mortgage approvals ticked up by 0.9% in July and the Nationwide Building Society reported that annual UK house price inflation in August was 10% (the tenth month in a row of double digit house price inflation and the 13th month in a row for rising house prices overall. The housing market appears to us to be in fine health despite the growing number of doomsayers. 

The Bank of England also reported this week that mortgage rates are continuing to rise, and we believe that they will continue to follow Bank Rate on its upward trajectory. However, the supply of homes for sale continues to trail that of the demand from those wanting to move home which continues to underpin house prices.

Investors appeared most concerned about housebuilders this week, which we believe is more to do with their perception of macroeconomic clouds gathering, rather than the performance of the individual housebuilders themselves: our sources are still reporting brisk business in the market for new build homes.

Neither Ms Truss nor Mr Sunak have giving the housing market much time during the summer hustings, but we believe this is because their message has been tailored to the settled, housing equity rich, rather than the electorate as a whole. The baby boomers may be the ones who open the door to Number 10 next week, but in the longer term we believe Generation Rent will have control of the keys.