UK housing market could suffer from mortgage drop off
Philip McHugh February 26th 2018 - 2 minute read
- Drop in home loans may weaken GBP
- USD likely to rise on uptick in new home sales
- New Zealand expected to report trade deficit
UK mortgage approvals to continue to slide?
UK Finance, the lobby group composed of the old British Bankers’ Association and the Council of Mortgage Lenders is expected to report today that UK mortgage approvals fell again in January.
Economists forecast that the number of UK mortgage approvals will have fallen again last month, with expectations that they may have dropped below 36,000 at the start of the year.
While these months are generally seen as quiet at the best of times analysts suggest that the Bank of England’s (BoE) rate hike in November is likely having an impact on market activity.
The Bank of England will release more in-depth mortgage lending figures later this week, which are expected to support suggestions housing activity has slowed in 2018.
US new homes sales forecast to creep higher
USD may tick higher this afternoon, with analysts forecasting that sales of newly-built houses in the US will have edged a little higher in January.
The current consensus amongst economists suggests that sales will have risen 3.6% from 0.625m to 0.65m at the start of the year, helping to reverse the 9.3% contraction seen in December.
Analysts suggest that slightly better weather in January may have helped drive sales higher and should see sales come in line with the long-term average of 650,000.
However there remains some concern that rising house prices could still weigh on sales growth, with first time buyers being largely priced out of the market.
Possible trade deficit likely to dent NZD
The New Zealand dollar may be forced to cede some ground later this evening when the country publishes is latest trade balance figures.
December’s reading saw New Zealand register a trade surplus of NZ$640m, the country’s largest surplus since 2015.
However economists are pessimistic about January’s reading, as they forecast the latest trade balance will see New Zealand report a deficit of NZ$270m.
Analysts expect this will be driven by a sizable fall in the value of New Zealand’s exports, despite dairy prices having risen at the start of the year.
Upcoming Data
Monday, 26 February, 2018
09:30 GBP Mortgage Approvals
15:00 USD New Home Sales
21:45 NZD Trade Balance
Written by
Philip McHugh