Chat to a team member

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

Goodbye 2019. And bring on the 2020s.

Dec 20, 2019 | Blog

Given the frenzied political backdrop, 2019 was quite a year…

Mark Posniak
Mark
READ MORE

UK property market got result it wanted

Dec 16, 2019 | Blog

The UK property market got the result it wanted. Translate: Boris…

Jonathan Samuels
Jonathan
READ MORE

General Election result could impact property prices for years to come.

Dec 02, 2019 | Blog

At a couple of events in November — a podcast and panel respectively…

Jonathan Samuels
Jonathan
READ MORE
Sections
Archive
Twitter
Follow us @octanecapital

11 months ago
@AskAmexUK I love my Amex and want to use it even more with @ImagineCurve! Please bring it back @AmexUK @TheFCA… https://t.co/7D0sTD0BD9

11 months, 1 week ago
RT @mposniak: First 2 pages of the Bridging Introducer feature on @OctaneCapital below where we talk about our plans for 2019 and… https://t.co/CzvQeUBd2R

11 months, 1 week ago
RT @mposniak: Second 2 pages of the Bridging Introducer feature on @OctaneCapital below where we talk about our plans for 2019 an… https://t.co/OtyvK6Ws4z

11 months, 1 week ago
RT @mposniak: Lets not forget about what makes @OctaneCapital's #3rdGen engine room tick. Nice little piece in Bridging Introduce… https://t.co/7TzaDzUUbX

11 months, 1 week ago
RT @mposniak: Delighted to confirm that the 2nd Annual @OctaneCapital #3rdGen #OctaneCapitalCup2019 will be contested on Wednesda… https://t.co/41FYEKOOJd

11 months, 1 week ago
RT @Beth_JFisher: Every other month, @BandCNews magazine will feature one key industry figure sounding out another. For the first iss… https://t.co/ShVUKUm9ub