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The latest National House Building Council figures for new house registrations in 2016 Q2 confirm the strengthening trend in project starts previously reported by Glenigan. NHBC registrations of new homes rose 1% in the second quarter of 2016 versus a year ago to 41,222 units, the highest level since the fourth quarter of 2007.

However the latest Glenigan data for the three months to July has seen a marked 34% decline in private residential projects starting on site compared a year ago. Taken together these two data series suggest that housebuilders adopted a cautious approach immediate run-up to the EU referendum; holding back from opening new sites, but accelerating work on existing sites.

Housebuilders will be watching post referendum consumer sentiment and activity in the wider housing market especially closely over the coming months.

The latest Bank of England mortgage approvals data, for June, shows that lenders approved 64,766 mortgages in June compared with 66,722 in May. This extends the gradual weakening in approvals seen in previous months. This may in part reflect households holding back from major financial decisions ahead of the referendum, but is also likely to reflect short term market distortions caused by the introduction of a stamp duty surcharge on buy to let and second home purchases. Indeed in contrast to mortgage approvals, generally consumer borrowing in June was strong, growing by 10.3% its fastest annual rate of growth since October 2005.

It will be several months before we have a clear picture of actual post-referendum mortgage approval and housing market activity.

In the meantime, sentiment surveys suggest that there has been a sharp deterioration in consumer confidence following the Brexit vote. Chartered surveys report that there has likewise been an initial drop in new instructions and buyer interest following the vote. However, as the political dust settles, consumer confidence is likely to steady. The housing market is now entering the seasonal summer holiday lull. The test will be the strength of consumer confidence in September as we enter the autumn housebuying season.

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