1. UK HOUSING MARKET: Do the green shoots have roots? Martin Gahbauer Chief Economist Nationwide Building Society

2. Outline  The big picture  Current market trends  What is the true affordability picture?  Longer term market considerations

3. The big picture – 4 possible scenarios What sort of recovery? Gradual recovery V ShapeL shape W shape double dip

4. The big picture – recent trends

5. The big picture – Labour market

6. Recent housing market trends - Activity

7. Recent market trends - Prices

8. Recent trends – Supply/demand balance

9. Recent trends – Restricted supply

10. Recent trends – House building

11. Recent trends – Restricted supply

12. What is the true affordability picture?

15. Longer term considerations – Public debt

16. Longer term considerations – Exit from QE

17. Longer term considerations – Supply

18. Conclusions  Macro picture looking better but don’t assume we are out of the woods  Housing market transactions have bottomed at very low level  Housing only affordable if you assume interest rates will remain low forever and everyone has the required deposit  Deterioration of public finances could put upward pressure on mortgage rates in the long term  Housing construction not keeping pace with household growth