LONDON

The last Q4 15 estimate surprised on the upside as GDP growth was revised to 0.6%, with the services sector continuing to fuel growth. However, despite 12 consecutive positive quarters, business sentiment suggests a slowdown in Q1 16. PMI surveys were generally subdued, albeit all above the expansionary threshold of 50 The Council of Mortgage Lenders (CML) confirmed that gross mortgage lending was £25.7 billion in March, which is an annual increase of 60%. The CML analysis indicated that there were around 30-35,000 more transactions that went through in March than usual. They expect to see around 10,000 less mortgage transactions than normal over the next three months, which should offset the increased transaction levels in March. House price growth trends were a mixed bag in June, depending on the data provider. Halifax annual house price growth slowed in the three months to June to 8.4%, compared with the 9.2% rate recorded in May. According to Nationwide, growth edged up to 5.1% in June from 4.7% in the previous month. Most of this data concerns the period leading up to the EU referendum and the result itself is likely to have a detrimental effect on growth in the near term. Given the unsustainable affordability levels reached, especially in the capital, a slowing trend was already underway and ‘Brexit’ will only accelerate this correction. In the meantime, however, mortgage rates fell to their lowest figure on record in June, with the fixed 2-year fixed rate for a 75% LTV mortgage at just 1.74%. Colliers’ view: House price growth is set to slow in some areas and turn negative in others, but a cut to the base rate and record low mortgage rates should, to some extent.