Signs of improvement in housing market

Figures have revealed that the UK housing market has shown some signs of improvement recently, as lending figures for August increased.

According to the Council of Mortgage Lenders, a total of 52 thousand home loans were advanced for house purchases in August – representing a rise of 7% since July.

Remortgaging also increased by 30% in August 2011 (compared to the previous year) and a total of 34, thousand loans were taken out.

Lending for first time buyers and home movers was at its highest rate for more than a year with 96% of first time buyers in August taking out a repayment mortgage. The number of first time buyers increased by 5% from August 2010 through to July 2011.

“Even though it is impossible to ignore the knocks to confidence emanating from the Euro zone, August lending showed welcome signs of life,” said Paul Smee, Director General of the Council of Mortgage Lenders.

These recent figures represent an increase after a turbulent few years in the housing market. There is still however little indication that the housing market will return to pre-recession levels.

Recent research from Halifax bank suggested that the housing market was “lacking direction” as well as a “very mixed pattern of monthly price movements.”

Martin Ellis, Housing Economist at Halifax commented; “Greater uncertainty about economic and personal financial circumstances, together with pressure on householders’ finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand.”

With the base rate remaining at an all time low, borrowers can benefit from paying very little back in interest. Now could be a good time to take out a mortgage therefore.

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3 thoughts on “Signs of improvement in housing market

  1. I read with interest the article regarding improvement in the property market. This mixed height of uptake of new mortgages, and remortgages has been slow coming. Firstly, there is insufficient confidence for lenders to advance more than 70% of a property’s value, and secondly the amount of bad debt created by individuals are staving off new uptake, as lenders will not advance to anyone with a blemished history of bad debt. This stalemate situation will last indefinately, unless lenders pass on more of the savings of the low interest base rate, and stop penalising those with existing mortgages, who are the stronghold of the country’s housing stocks. Too many people remortgage because of the lack of support from their lenders, and ultimately, no confidence and trust element is present. This needs to be turned around.

    Lesley Williams

  2. British housing is in crisis, with many people paying more in rent than they would have paid in mortgage repayments had they been able to afford the minimum deposit. When eventually the B of E raises interest rates (they cannot be held down forever)There will be a mass of repossesions. If only we had social housing to fall back on.

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