Market Watch: How will Autumn Statement impact housing?


As more good news emerges and Rics summons a half-smile, will the Autumn Statement make any provision for housing?

The sea change alluded to last week in terms of the emergence of good news has become a deluge this week and, apart from nuclear weapons exploding in North Korea and a few threats from Japan and China around trade negotiations, things are looking considerably better than they could have been.

Perhaps the most important news was the latest services PMI, which showed the biggest-ever month-on-month increase in activity in this sector, rising from 47.4 in July to 52.9 in August. This puts us back at pre-referendum levels and completes a full house of positive PMI figures.

Meanwhile, the new Chancellor has set a date for the all-important Autumn Statement, which is likely to lead on some pretty heavy investment, including something around housing. We wait with bated breath.

Speaking of housing, Rics says the market looks to be settling down again, with sales and prices expected to rise over the next few months. It reckons prices will increase on average by 3.3 per cent a year for the next five years – a much slower rate of growth than it predicted pre-Brexit but growth nonetheless. Looks like the doom-mongers will be wrong yet again, then.

Even the top end of the housing market – hit more by tax changes than by Brexit per se – has seen viewings up by almost half once more, now that prices have changed to take into account the extra stamp duty, and now that currency changes mean foreign buyers are looking at more of a bargain – in their eyes, anyway.

Elsewhere, Bank of England governor Mark Carney was hauled over the coals by MPs – who obviously know far more than him – for acting too early in cutting rates. Seriously, Carney can’t win with that lot. If he had done nothing and issues had arisen, no doubt he would have been scolded for inaction. I just hope we see no more cuts as it seems enough has been done on that front and, surely, we need something in reserve.

In the markets, three-month Libor is at 0.38 per cent while swap rates have decided to go on strike.

  • 2-year money is unchanged at 0.45% 
  • 3-year money is down 0.01% at 0.45%
  • 5-year money is up 0.01% at 0.51%
  • 10-year money is up 0.03% at 0.74%

Barclays has introduced some new rates: its 10-year fix has fallen to 2.49 per cent and its seven-year fix to 1.99 per cent. It also has a new two-year fix at 60 per cent LTV at 1.33 per cent.

Nationwide has reduced rates further on longer-term fixes, by up to 0.2 per cent, and introduced tracker rates at 95 per cent LTV available at 3.59 per cent with a £999 fee. Its five-year fix is available from 1.99 per cent to 60 per cent LTV with a £999 fee.

After the latest moves by lenders to change their age policies, Leeds Building Society has moved its maximum age at the end of the term from 75 to 80.

Kensington has made a raft of changes, with rates cut by up to 1.1 per cent and the launch of a large-loan, one-year fixed rate at 3.59 per cent. It has also launched a residential new-build range up to 85 per cent LTV, including flats.

Aldermore has made some policy changes and now allows a remortgage on a property owned for less than six months to pay the existing loan plus 100 per cent of the improvement costs. It has added some accountancy qualifications that are now accepted, simplified some validations of income and allows properties subject to a Section 106 agreement. It has also reduced its two-year Help to Buy fix from 6.09 per cent to 4.98 per cent.

Newcastle has a new ID&V check, which you all need to register for, admin included. We need to push on with electronic ID&V verification, which is surely more secure than checking a physical passport these days.

In buy-to-let, it has been interesting to see the rise in landlords who are considering renting out their property via Airbnb. This is something that most lenders are not ready for and falls in a grey area between ASTs and holiday lets.

Whilst this potential change to shorter-term renting could create some social issues, the time is ripe for a couple of lenders to offer products on this basis, or to allow landlords to do this if they wish.

Investec continues its recent good work by reducing buy-to-let rates by up to 1 per cent, which are now available from 2.91 per cent to 50 per cent LTV for high-net-worth applicants.


Andrew Montlake is director of Coreco Group