Chat to a team member

CORONAVIRUS: The health and safety of our customers and partners is our priority UPDATE

Blog

Time for vigilance amid 'notable slowdown'

Jonathan Samuels Jonathan Samuels
Posted on Jul 28, 2017 | in Blog

The first estimate of GDP in the second quarter of the year emerged this week and it didn't make for great reading.

With growth of just 0.3%, the Office for National Statistics declared that the UK economy is undergoing a ‘notable slowdown’.

After output of an even more miserly 0.2% in the first three months of the year, the economy is in one hell of a rut.  

One of the major drags on the economy in the second quarter was the poor performance of the construction sector. It contracted by 0.9%, something that everyone involved in the property world should take note of. 

Another warning shot was delivered just 24 hours after the GDP data in the form of a Foxtons profit warning. The London-focused estate agent said profits had plummeted by nearly two thirds (64%) in the first half of the year.

What's very clear from all this is that the property market is looking very vulnerable in the current climate of political uncertainty and economic stagnation.

Storms clouds are starting to gather over the UK housing market and all the major house price indices show that values are coming down slowly but surely, especially in the capital.

Against this backdrop, buyers, brokers and lenders need to be increasingly vigilant.

Within the specialist lending space, brokers should be doing a little bit more duedil than normal on the lenders they are considering approaching.

How experienced are they, have they been through an economic downturn before, how robust are their funding lines, and have they priced their current book of loans for risk?

If the market continues on its current trajectory, many lenders who entered the sector for a quick buck could quickly find themselves out of their depth.

And if that happens, ensure you’re not dragged down with them. 

More in this section

Mark Posniak

Four years old, flat out and having fun

Feb 24, 2021 | Blog

I can’t believe that this week we celebrated our fourth birthday,…

Mark Posniak
Mark
READ MORE

Specialist lending flies over the cuckoo’s nest

Feb 11, 2021 | Blog

If the closing stages of 2020 were crazy, the start to 2021 has…

Mark Posniak
Mark
READ MORE

Redemptions milestone amid pandemic my proudest moment yet

Jan 15, 2021 | Blog

Over the years the team here at Octane has achieved many great…

Matt Smith
Matt
READ MORE
Sections
Archive
Twitter
Follow us @octanecapital

2 months, 2 weeks ago
Cant stop laughing at this!!! https://t.co/qdObP94zF6

1 year ago
RT @mposniak: @OctaneCapital #3rdGen CEO Jonathan Samuels speaking style #TSLE2020about the risks of Dual Rep - especially for Co… https://t.co/iicz42Yboh

1 year ago
RT @mposniak: So never posted anything yesterday as I was travelling (a day late due to Storm Ciara I might add!!) Delighted to… https://t.co/nNP977c8IK

1 year ago
RT @mposniak: Another completion this time to make up for the lost day yesterday... Lovely £1.25m @OctaneCapital #3rdGen… https://t.co/r3ESjSiysv

1 year ago
RT @mposniak: Last one to talk about today but its a special one.... Delighted to complete a lovely @OctaneCapital #3rdGen… https://t.co/LQEJw9uBUw

1 year ago
RT @mposniak: Qualification for the 3rd Annual #OctaneCapitalCup in now open!!! Contact your BDM for more info on how to qualify… https://t.co/BmyjR2qLGF