Fresh fears of housing market 'double dip' as mortgage lending crashes to new low

doire_2

House prices tipped to fall 5% as new low in mortgage lending raises fears of market 'double dip'

* Net lending second lowest figure ever recorded
* Prices could fall 3% during the second half of this year
* House prices to drop around 5 per cent next year
* Confirmation housing market is heading for 'double dip'

There were new fears for the state of the UK housing market today after mortgage lending dived to the second lowest figure ever recorded.

Lending fell sharply in July as activity in the housing market remained subdued, new figures showed.

Net lending, which strips out redemptions and repayments, totalled just £86 million during the month - a steep fall from June's £518 million, according to the Bank of England.

The figure was the second lowest since the Bank's records began in 1993, although there have also been two months when net lending was negative.

Howard Archer, chief UK and European economist at IHS Global Insight, said: 'Although the Bank of England somewhat surprisingly reported that mortgage approvals edged up in July, the fact remains that they were still at a very low level and point to ongoing muted housing market activity.
'Housing market data and survey evidence has been consistently downbeat recently and this is no exception.
'Consequently, we continue to suspect that house prices will fall back over the latter months of 2010 and then very likely soften further in 2011.'
He expects house prices to fall by around 3 per cent during the second half of this year, followed by a drop of around 5 per cent in 2011.
There was a slight increase in the number of people remortgaging during July, with approvals for those switching to a new deal reaching 26,951, slightly up on the previous six-month average, but there was a small dip in those unlocking equity from their home or taking out a buy-to-let mortgage.
Unsecured borrowing also remained subdued during July, with net lending rising by £173 million.
Within the total credit card borrowing rose by £213 million, but lending through loans and overdrafts contracted by £41 million.
Andrew Goodwin, senior economic adviser to the Ernst & Young ITEM Club, said: 'This morning's figures provide further confirmation that the housing market is heading for a double dip, with net mortgage lending pretty much flat and the number of mortgage approvals remaining very low.
'These figures tend to be well correlated with prices and they point to falling prices over the second half of this year, particularly now that the supply shortages of the early part of the year have eased.'
The Building Societies Association also released figures today showing that total mortgage advances by mutuals reached their highest level so far this year of £2 billion during July.
But once redemptions and repayments were taking into account, net lending continued to contract, with homeowners repaying £379 million more than they borrowed in the month.
Customers also continued to withdraw their savings from building societies during the month, with people taking out £1.31 billion more than they paid in, the fastest rate of withdrawals for more that a year.
Adrian Coles, director-general of the BSA, said: "The withdrawals may indicate the difficult economic conditions that households currently face.
'In addition, these withdrawals could have been intensified by competitive rates from National Savings and Investments, which subsequently withdrew products in the middle of July in the wake of considerable inflows.'

http://www.dailymail.co.uk/news/article-1307671/Mortgage-lending-dives-second-lowest-figure-recorded.html#ixzz0yBd4NQmv

novazombie

doire wrote: »

http://www.dailymail.co.uk/news/article-1307671/Mortgage-lending-dives-second-lowest-figure-recorded.html#ixzz0yBd4NQmv

Net lending second lowest figure ever recorded
Prices could fall 3% during the second half of this year
House prices to drop around 5 per cent next year


Read more: http://www.dailymail.co.uk/news/article-1307671/Mortgage-lending-dives-second-lowest-figure-recorded.html#ixzz0yBgiboug



I'd say 5% minimum falls next year and then more the next few years.

phil_b_2

Sentences and bullet points starting with 'House prices could...', 'Prices will...', 'Property may fall X% in the next....' have been pasted around for soooooooooo long now isn't it getting at all tiresome? I wish prices would do something either way cos the stagnation is obviously boring.

doire_2

novazombie wrote: »

Net lending second lowest figure ever recorded
Prices could fall 3% during the second half of this year
House prices to drop around 5 per cent next year


Read more: http://www.dailymail.co.uk/news/article-1307671/Mortgage-lending-dives-second-lowest-figure-recorded.html#ixzz0yBgiboug



I'd say 5% minimum falls next year and then more the next few years.

Maybe the DM doesn't want to scare the sheeple too much

1984ReturnsForReal_2

novazombie wrote: »

and then more the next few years.

Whatever the drop I think it will be short & sweet & will not drag on.

It will stagnate after for quite some time though.

Really2

People do realise this is an increase on the previous month not a fall.
Basically not expanding as quickly.

doire_2

Really2 wrote: »

People do realise this is an increase on the previous month not a fall.
Basically not expanding as quickly.

Net lending, which strips out redemptions and repayments, totalled just £86 million during the month - a steep fall from June's £518 million, according to the Bank of England.

.................

Really2

doire wrote: »

.................

I know it is hard for daily mail quoter's to understand but here you go.:)

http://www.rttnews.com/Content/EuroEconomicNews.aspx?Id=1406111&SM=1

The Bank of England said net lending secured on dwellings increased GBP 0.1 billion, well below the June increase of GBP 0.5 billion.

So July would be £0.6Billion more than May and only £0.1billion more than June.

Like I said the increase is slowing it has not gone negative.

StevieJ

Really2 wrote: »

I know it is hard for daily mail quoter's to understand but here you go.:)

http://www.rttnews.com/Content/EuroEconomicNews.aspx?Id=1406111&SM=1


So July would be £0.6Billion more than May and only £0.1billion more than June.

Like I said the increase is slowing it has not gone negative.

It's the way ya tell em

doire_2

Really2 wrote: »

I know it is hard for daily mail quoter's to understand but here you go.:)

http://www.rttnews.com/Content/EuroEconomicNews.aspx?Id=1406111&SM=1


So July would be £0.6Billion more than May and only £0.1billion more than June.

Like I said the increase is slowing it has not gone negative.

OK my mistake. Still a nice snippet from the Ernst & Young ITEM Club though

Really2

doire wrote: »

OK my mistake.

We all make them.