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RICS Communications
Simon Rubinsohn Chief Economist
25th September 2008
The Outlook for the Housing Market
25th September 2008
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Agenda
25th September 2008

• Credit crunch
• Housing/Mortgage Market
• Economic Outlook

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The credit crunch is still very much in play

25th September 2008

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Loan officers are continuing to tighten lending
criteria
25th September 2008
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The block on finance has hit the housing market
more dramatically than in the early 1990s
25th September 2008

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This is visible in the speed of price adjustment

25th September 2008
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And in the collapse in transactions
25th September 2008
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New buyer enquiries are no longer so negative but
it doesnt feel like a turning point
25th September 2008
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Stocks still remain high despite the lack of
distress selling
25th September 2008
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Home-owners are increasingly turning to the
rental market given the block on sales
25th September 2008
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A key issue for lenders is the collapse in the
securitisation market

25th September 2008
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Another way of looking at the importance of
securitisation
25th September 2008
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The economic numbers will remain grim for some
time to come
25th September 2008
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The good news is that oil prices have fallen
50 and that wage increases are still subdued


25th September 2008
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The gilt market is betting on lower interest
rates
25th September 2008
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But with unemployment now rising sharply,
mortgage arrears and repossessions are set to
climb
25th September 2008
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Even with the drop in house prices, the market
is still stretched
25th September 2008
Source HBOS
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Lack of supply should provide some support in
the medium term

25th September 2008
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25th September 2008

• Conclusions
• Credit crunch still fierce
• Mortgage funding to remain in short supply
• Economic performance to weaken
• House prices to fall further
• Collapse in house building medium term
  support

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