UK Housing Data Points To Deepening Brexit Concerns

Tuesday 1st October – 09:09 (BST)

The UK housing market, similar to the global currency markets, has had its fair share of ups and downs in recent months. Although it has remained relatively resilient since the UK referendum back in 2016, there are now signs of a slowdown. Figures released yesterday by the Bank of England showed the number of mortgages approvals in the UK dropped to 65,545 in August from an 18-month high of 67,011 in the previous month and below market expectations of 66,400.

And earlier today, the Nationwide’s House Price Index showed an increase of 0.2 percent year-on-year in September 2019, after a 0.6 percent rise in the previous month, and below market consensus of 0.5 percent gain. House price growth remained below 1 percent for the tenth month in a row. This was the lowest growth in house price growth in eight months.

“The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.” Robert Gardner, Nationwide’s Chief Economist, said.

Sterling moved lower on the back of both announcements and is currently trading below $1.23 versus the US dollar and €1.13 versus the Euro.

Attentions now turn to the UK Prime Minister Boris Johnsons latest attempts to negotiate a resolution to the Irish backstop. At the Conservative Party conference on Monday, he said: “I’m cautiously optimistic. We have made some pretty big moves, we are waiting to see whether our European friends will help us and whether we can find the right landing zone.”