Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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May 31, 2024

GFRD | Economic data – Prices resume upwards trend, Nationwide; Mortgage rates turn downwards for first time since February | Fortnight ahead

Company news

Galliford Try Holdings (GFRD, 259p, £266m mkt cap)

UK construction and infrastructure services group. Contracts. The group’s Building division has signed two new contracts worth £101m. The Building Southern business has reached financial close with the Home Office, through the Ministry of Justice framework, to complete the new £70m facility at Campsfield. Building East Midlands has been appointed by the Defence Infrastructure Organisation to undertake the £31m PRIDE II project at RAF Wyton, consisting of a combination of refurbishment and creation of new secure office space for UK Strategic Command.

Economic data

House prices. The latest House Price Index from the Nationwide showed a return to M/M growth in May after two months of decline. Prices rose by 0.4% to £264.2k, following declines of 0.2% and 0.4% in the previous two months; the Y/Y change increased to +1.3% from 0.6%. Prices are now recovered 2.8% since their recent low of £257.1k in March 2023.

UKHousePrices

Mortgage rates. There has been a small fall in the cost of some fixed-rate mortgage products for the first time since February, according to the latest Rightmove. Rates for five-year fixed rate mortgages, the most popular lending product, since late July, bottoming out in early February and edging up since (below, left). However, this week there were slight reductions in the 90% and 85% LTV products, for both five-year and two-year fixed products. For example, for five-year mortgages at 90%, the average rate peaked at 6.24% in the week to 25 July, fell to 4.74% in February, but in the last week eased by 2 bps to 5.17% (below, right).

Viewpoint: A very small step but, directionally, significant: it looks like an improvement in mortgage lenders’ risk appetite – and a realisation that recent rises had turned the demand-supply balance against them, in what remains a competitive market.

UKMortgageRates

Fortnight ahead

31 May 24 – Fortnight ahead
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