10 Jan 2017

Growth in Housebuilding by Mark Blackwell, Lending & Surveying Services Director at eTech Solutions 

Mortgage Finance Gazette, January 2017

The building industry continued its recent bounce back since June as the sector beat expectations with the IHS Markit / CIPS construction purchasing managers index up from 52.6 to 52.8.

Growth in housebuilding plus commercial and civil engineering projects helped boost the figure to an eight month high. Readings above 50 demonstrate growth.

This was the third consecutive month of growth since a downturn in the third quarter albeit below levels of 2015 and 2014.

Growth in the residential property sector feeds through to mortgage finance volumes. This growth coincides with mortgage lending increasing at its fastest level since 2008 and personal debt including credit cards at the quickest since 2005.

The Office for Budget Responsibility commented at the autumn statement that levels of household debt are “unprecedented in the latest available historical data right back to 1963”.

Whether the bank of England’s economic policy can smooth the path or their wish to intervene in mortgage policy the housing market will still remain largely responsive to buyer confidence.

The Government’s pledge to see housebuilding growth will no doubt partly satisfy a demand pull as well as provide inflationary challenges for the Bank to deal with.

These macro issues are ever present and part of the residential property risk matrix that is helped by accurately representing property values using ever improving data to make more accurate property and mortgage underwriting decisions.

The future maybe uncertain but the valuation risk management outlook is a more insightful one as property underwriting is in better shape if you know who to work with. Valuation professionals are giving lenders and consumers more confidence.

Indices reflecting growth and debt maybe moving upward but to accurately reflect what this means to property values is down to valuers being the eyes and ears of lenders assessing what they see on the day and providing consistent and quality reporting on mortgaged assets.

 

The full article can be seen here

 

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