EMF
Q32011
Quarterly Review of European Mortgage Markets 3rd Quarter 2011
QUARTERLY STATISTICS European Mortgage Federation Alessandro Sciamarelli | Head of Statistics | asciamarelli@hypo.org | Tel: +32 2 285 40 42
weak macroeconomic environment, ongoing sovereign debt and funding crises conThe tinue to dampen mortgage demand, with a continuation of the subdued trend in mortgage lending observed across most EU markets in Q1 and Q2 2011, Germany and the UK being the only exceptions. Housing markets conditions continue to deteriorate, even though with different trends across countries. Nominal house prices increased on a yearly basis only in Belgium, France, Germany and Sweden. Monetary policies were further tightened over the summer of 2011 but quickly reversed to expansionary stance in Q4. As a result, mortgage interest rates recorded only small movements and remained at low levels.
New mortgage lending in the EU continues to suffer from poor economic growth, high unemployment rates, funding problems and sovereign debt crisis In Q3 2011, the general subdued trend observed in Q1 and Q2 2011 was confirmed. New lending markets generally recorded poor performances, which in most cases were weaker than in Q2 2011 (Table 2). The macroeconomic context continued to be unsupportive of mortgage demand: the only EU economy in recession in Q3 2011 was Portugal, but everywhere GDP growth rates have clearly lost further momentum (Chart 5); unemployment rates have not decreased, except for Germany and Sweden (Table 6). Continued tightening in lending criteria, persistent funding difficulties due to the drought in inter-bank lending market and the uncertainty stemming from the sovereign debt crisis have all contributed to subdued performances in national mortgage markets in Q3 2011.
In the UK, gross lending recorded increases of 17.7% quarter-on-quarter and of 3.6% year-on-year (the latter following a 3.1% fall in Q2 2011). A 21% increase in house purchase lending was the main driver of this quarterly increase, but house purchase lending was still 5% lower than Q3 last year. There was also an increase in remortgage lending which grew by 15% compared to Q2 2011 and by 25% on a yearly basis. The Danish mortgage market has been very subdued through 2011 and this trend has continued in Q3 2011. Net residential lending fell to EUR 1.1 billion which is very low in historical terms. Since 1995, net mortgage lending has on average been worth EUR 3 billion per quarter in nominal terms. Gross mortgage