Invest & Fund: There’s light at the end of the tunnel for housebuilding
Invest & Fund is seeing signs of recovery in the housing market and underlined the importance of housebuilding for the country’s future.
The peer-to-peer development lending platform noted this week’s inflation data, which showed that prices had not continued to rise as quickly as expected, and the impact it had on the Bank of England’s decision to freeze rates.
Read more: BoE rate freeze: Industry reacts
This has had a knock-on effect on the outlook for housebuilding.
“In what could be the first signs of ‘non-locomotive’ light at the end of the tunnel for home builders, the big three developers share prices lurched upwards between four per cent to five per cent in the early FTSE 100 price action, signalling market speculators may be preparing to be long housing once again,” Invest & Fund.
“Stock pick tipster page Questor in the Telegraph eloquently put that in their view, ‘falling house prices present a buying opportunity for investors who can look beyond short-term hype. As house prices never rise uninterrupted ad infinitum, they are unlikely to decline perennially.’ This, in essence, is what we have been stating in our commentary since the first quarter: people are sitting on the sidelines searching for the bottom and waiting for a catalyst event. Could a flattening of the tightening cycle be the beginning of that chain of events? The speed of the news cycles these days means that we find out soon enough.”
Read more: Is P2P property lending the new BTL?
Invest & Fund noted the “entrenched supply and demand imbalance” in the housing market and said it is “the critical metric of concern” when assessing value.
“Regardless of what happens in the markets or what has probably happened at the MPC meeting, now is the time to look to the future, and a big part of the future will be the government’s response to stimulating and growing the housing market,” the platform said.
Read more: Invest and Fund predicts P2P ‘rebirth’ as real estate investment evolves
UK inflation fell unexpectedly to 6.7 per cent in the 12 months to August. Yesterday, the Bank of England held the base rate at 5.25 per cent, after 14 consecutive rate hikes.