Positive Signs That The Housing Market Is Improving
August 2009
The Council of Mortgage Lenders (CML) confirmed today that the UK housing market is stabilising. Figures for June of this year show a 23% increase in mortgage lending
This month (August) has seen yet another increase in the number of mortgages being arranged nationally. At its highest level for a year and expected to continue this upward trend, nearly 45000 new mortgage loans were agreed.
A substantial number, some 17,200 of these were loans agreed to first time buyers. This itself marks a 26% increase on figures for the previous month.
These figures are of course well down on the previous 7-year averages but they do show a marked improvement and are a sign that confidence is returning to the market.
CML economist Paul Samter is quoted as saying: "Low interest rates and realistic selling prices have helped generate a welcome increase in transactions. But there is some way to go before we reach normal levels of activity."
Quarterly figures taken across the nation reveal a 50% increase in mortgage lending over the preceding period which, whilst still down on figures for the same period last year, is another encouraging step in the right direction.
CML also commented that banks and building societies are loosening their grip on lending criteria. However first time buyers are currently having to raise much larger deposits, now standing at 25% on average.
The amount borrowers are being lent in relation to their salary (known as income multiples) has also risen slightly. Typical first time buyer borrowing is now up to 3.08 times their salary over 3.04 on average in May with increases also noted for owner occupiers. Increases are reported in re-mortgages too. They are still low compared to figures from last year but are nevertheless increasing.
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