There’s a lot of talk at present about what’s going to happen to the mortgage and property markets in the next six months.
The reality right now is that both markets have stabilised. In recent months, lending volumes and house prices have been up marginally one month, down marginally the other (depending on the index or source), but overall the trend is very much one of sideways movement.
People are sitting on their hands, waiting for more visibility around the economy before they commit.
The Bank’s July mortgage figures, out on the last day of August, offered further evidence of this stabilisation. The number of loan approvals for house purchase in July (48,722) was at a similar level to June (48,562) and, in our opinion, they will remain at or around this level for the rest of the year.
There are downward pressures on the property and mortgage markets, specifically consumer caution and stringent lending criteria, and there are upward pressures, not least the level of Bank rate, attractive property prices in certain areas and some extremely competitive mortgage products at lower LTVs.
The two forces are cancelling each other out. The result is stabilisation.
In our opinion, the market has self-corrected very well and has learnt its lesson.
Source EAT 06.09.10 – excerpts from Brian Murphy recent interview. Brian is head of lending at the Mortgage Advice Bureau, a provider of mortgage and financial services to Besley Hill Estate Agents
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