Spring bounce in mortgage lending

setmefree2

Spring bounce in mortgage lending

The number of loans handed out for house purchases in the UK rose by 16% in April compared with the previous month, according to lenders.But the figure remains 28% down on the same month the previous year, the Council of Mortgage Lenders (CML) said.
The data adds further evidence to indications of a spring bounce in the housing market.
However, first-time buyers still have to put down an average deposit of 25% of the value of their new home.

ttp://news.bbc.co.uk/1/hi/business/8094698.stm

adr0ck

http://www.cml.org.uk/cml/media/press/2310

ad9898_3

Spring bounce in mortgage lending

The number of loans handed out for house purchases in the UK rose by 16% in April compared with the previous month, according to lenders.But the figure remains 28% down on the same month the previous year, the Council of Mortgage Lenders (CML) said.
The data adds further evidence to indications of a spring bounce in the housing market.
However, first-time buyers still have to put down an average deposit of 25% of the value of their new home.

Weren't things pretty crap this time last year ?, being 28% down on that can hardly be good news, but hey, if everything keeps being compared to last year I guess it looks good. 25% deposit though still needed as an average for an FTB'r, sounds a lot to me.

It really would be interesting to see if the current bounce is being underpinned by normal FTB'rs coming into the market and sustaining long term growth, or whether it's just a few STR's or cash rich buyers who have had enough of renting, if it's the latter the bounce won't last.

Dan:_4

ad9898 wrote: »

Spring bounce in mortgage lending



Weren't things pretty crap this time last year ?, being 28% down on that can hardly be good news, but hey, if everything keeps being compared to last year I guess it looks good. 25% deposit though still needed as an average for an FTB'r, sounds a lot to me.

It really would be interesting to see if the current bounce is being underpinned by normal FTB'rs coming into the market and sustaining long term growth, or whether it's just a few STR's or cash rich buyers who have had enough of renting, if it's the latter the bounce won't last.

I should imagine it is the normal FTB'rs coming to market, they have had a good 18-24 months to save a depoist whilst prices were crashing - and now with record low interest rates, and signs of the bottom, would seem the best time to buy.

Thrugelmir

ad9898 wrote: »

Spring bounce in mortgage lending



Weren't things pretty crap this time last year ?, being 28% down on that can hardly be good news, but hey, if everything keeps being compared to last year I guess it looks good. 25% deposit though still needed as an average for an FTB'r, sounds a lot to me.

It really would be interesting to see if the current bounce is being underpinned by normal FTB'rs coming into the market and sustaining long term growth, or whether it's just a few STR's or cash rich buyers who have had enough of renting, if it's the latter the bounce won't last.

Good point. For some of those who cashed in at the peak. ( There are 2 such couples that I know of). This may be the opportune time to buy. Particularly if you are in secure employment. These individuals obviously have sizable deposits to put down.

Working on the CML figures. The average FTB mortgage is £107k. With a deposit of £36k.

Average purchase price of property £143k.

In areas of the country £143k would be expensive for a lot of property. So this possibly supports this view that returning renters are underpinning the market.

Cannon_Fodder

Just spoke to our letting agent, who is also an estate agent, and was surprised at the honesty, that "prices will be forced down, once the low interest rate cushion is removed".

He also expressed the view that the current market is quiet..."people are not coming to the market to take the hit of a 30% reduction, while they can afford the mortgage".

Dan:_4

Cannon_Fodder wrote: »

Just spoke to our letting agent, who is also an estate agent, and was surprised at the honesty, that "prices will be forced down, once the low interest rate cushion is removed".

Why would this be the case? Your agent sounds like a fool.

Really2

Cannon_Fodder wrote: »

He also expressed the view that the current market is quiet..."people are not coming to the market to take the hit of a 30% reduction, while they can afford the mortgage".

Indeed my family EA is struggling to get houses on the market that are not forced. (not that I will belived, but things are selling but his majour problem at the moment is gazuping)

I am sure i said less houses would come on the market for the reason you stated last year and the bears mocked me, never mind hey it's Nice to be proved right occasionally:)

System

Dan: wrote: »

Why would this be the case? Your agent sounds like a fool.

Or a fictional figure.

Cannon_Fodder

Dan: wrote: »

Why would this be the case? Your agent sounds like a fool.

I thought it was accepted that low interest rates are helping people to afford their mortgages? And that some degree of inflation is lurking around and will need to be controlled...

Therefore higher interest rates will inevitably happen, its just a case of when, leading to *SOME* houses coming on the market before they get repossessed, or repossessions themselves...increasing supply, priced to get a quick sale, etc etc...

I thought this scenario was an accepted possibility. To have an EA admit it during a spring bounce was the remarkable bit.


Although, not every house needs to be forced to come on the market - for some the closer rungs of the ladder are good, hence the spring bounce numbers/interest.

Really2

Cannon_Fodder wrote: »

I thought it was accepted that low interest rates are helping people to afford their mortgages? And that some degree of inflation is lurking around and will need to be controlled...

Therefore higher interest rates will inevitably happen, its just a case of when, leading to *SOME* houses coming on the market before they get repossessed, or repossessions themselves...increasing supply, priced to get a quick sale, etc etc...

I thought this scenario was an accepted possibility. To have an EA admit it during a spring bounce was the remarkable bit.


Although, not every house needs to be forced to come on the market - for some the closer rungs of the ladder are good, hence the spring bounce numbers/interest.

i dont think any increase in base or any higher inflation is currently foreseen in the next 12-18 months. (where has "inflation lurking round the corner" been the widely accepted )

Even then rates will still be below what they were 9 months ago.

It could be 5 years+ before we see a base rate of 5%