UK housing survey to provide update on approvals trend

UK September lending data delivered a surprise fall in mortgage approvals. Housing demand conditions remain firm with the problem being more one of unresponsive supply rather than demand weakness. 

"We had thought that supply constraints would gradually ease, allowing approvals to continue a gentle upward trend and we still believe that basic story to be correct", says Societe Generale.

The RICS survey provides a reliable leading indicator of approvals in the form of new buyer enquiries. Whilst the rate of change of enquiries may have peaked, it is still well above that of actual approvals. It is expected to see a small rise in enquiries which should provide reassurance that approvals are still on an upward trend. Sales expectations should remain firm.