Twindig Housing Market Index (HMI) - 16 October 21

The Twindig Housing Market increased by 3.4% this week to 91.9 as RICS reported that a continued shortage of housing supply was likely to push UK house prices further still. House prices in the UK increased by almost £25,000 during the COVID-19 Stamp Duty Holiday. Many think that prices may soften following the end of the Stamp Duty Holiday, but RICS make a robust argument as to why that not be the case and this helped buoy investor confidence in a week where most of the economic news focused on negative rather than positive elements. 

Investors were comforted by this week's Credit Conditions survey which suggested that mortgages supply will rise and mortgage costs (mortgage rates) will fall in the coming three months implying lenders want to get more active in the housing market and are feeling more bullish in their outlook. Lenders will spend an awful lot of time managing the risks of their lending books and therefore we view this expansionary stance as a positive for the UK housing market. 

FTSE 100 housebuilder delivered a positive trading update this week, which lifted investor confidence in the overall housebuilding sector, of particular note, was the strength of the forward orderbooks (which look out a long way past the end of the stamp duty holiday).  Help to Buy sales were down significantly following the Help to Buy scheme changes in April this year, but overall these changes (regional price caps and first-time buyers only) did not cause Barratt to miss a step.

Challenger property portal OnTheMarket also had a good week as more estate agents paid more money to list their properties on the portal. This alludes to the confidence estate agents have in the housing market, upping their market spend when most expect a lull in activity following the end of the Stamp Duty Holiday