Headline data for UK mortgage approvals that suggest a softening of the households’ repair, maintenance and improvement (RMI) cycle is misleading and a closer inspection shows a far healthier position, Liberum Building Materials and Housebuilders Analyst Charlie Campbell (pictured below) says.
In an eight-page PowerPoint, Charlie puts into context stock market anxiety about residential RMI, flagging that mortgage approvals have been ahead in six of the eight months in 2014 to date and are up 15% overall.
Activity in July 2014 was a post-crisis high and “we are also encouraged by the recent Credit Conditions Survey which showed banks expecting to increase mortgage supply in the fourth quarter, which may lead to lower mortgage rates,” Charlie said.
Good mortgage supply should continue to fuel rising transactions, the main driver of RMI, which were up 15% in 2013 and 20% in 2014 to date, he adds.
Charlie has covered the sector for 17 years.
For Charlie’s analysis of RMI drivers and the outlook, download his Powerpoint here >>
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