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Rise in mortgage deals brings hope that homes market has bottomed out
Jonathan Prynn14.04.09
THE housing market was given a glimmer of hope today with a small rise in the number of home loans.
Banks and building societies approved 24,300 mortgages for home purchases in February, up four per cent from January.
Although the figures are still close to all-time lows they are a pointer towards the property market starting to bottom-out with the prospect of a revival later in the year.
Mortgage approvals have collapsed by two-thirds since the boom years as banks have imposed tough new lending terms.
Michael Coogan, director general of the Council of Mortgage Lenders, which compiled the figures, said: "There are some positive signs. Some large banks are making more funding available through enhanced lending commitments, which is helpful but will not satisfy consumer borrowing demand on its own."
The number of loans to first-time buyers was up by seven per cent to 9,400 but the average deposit was a record 25 per cent. The average first-time buyer loan was £95,000, down from £114,000 in February.
Estate agents have reported a big increase in buyer enquiries since the New Year and some City economists say there may be light at the end of the tunnel. Howard Archer of forecasters IHS Global Insight said: "There are increasing signs that housing market activity may have passed its worst point."
The figures also reveal a major shift away from tracker mortgages, which move in line with the Bank of England's base rate, to fixed deals. In February 56 per cent of new loans were at fixed interest rates, up from 49 per cent in January.
Reader views (7)
How many properties are for sale in London at £95,000?
How many people can put down a 25% deposit on a property in London at any price?
Before I'm trampled to death in the stampede, let me point out that actual purchases are 48% lower than last year.
Recovery in the housing market? I don't think so.
- Kate, London
Damned lies and statistics.
- Dave Davies, Basingstoke
Ridiculous assertions on such a low statistical base - once again those with vested interests i.e. Agents and the media who require property ads are grasping at straws
There is at least another 20% to come off the prices until average property is 3,5 times average earnings - I will not buy in the UK again until at least Dec 2010
- Laurence Floyd, London and North Cyprus
"The number of loans to first-time buyers was up by seven per cent to 9,400 but the average deposit was a record 25 per cent. The average first-time buyer loan was £95,000, down from £114,000 in February."
Er, how many properties in London are on sale at or anywhere near £125,000? Unfortunately, the answer is not very many.
Prices are still utterly, crazily unaffordable and, welcome as recent falls have been, they are only the tip of the iceberg.
The best advice for FTBs is to wait and enjoy the return to sanity.
- Rob, London, UK
If they could only manage to limit sales to ten properties in April and follow this by 100 sales in May, the vested property interests could scream that sales had increased 1000% and that a property boom is now in place BUY NOW - BUY NOW. "There are three kinds of lies, lies, damn lies and statistics" (Disraeli)
- Trevor, Southend UK
The greed of the house price bubble has been the single worst factor of the financial turmoil we are now in.....yet you want it to resurface...?!?
Madness
- Lb, London
It's a tiny rise at a time of year when mortgages normally zoom up!
Those few luckies that can market and sell their gaff, at a severe cost to themselves, are the tip of the iceberg.
Everyonne is hanging on to try and recoup their pension pot-home prices before they sell.
Brown has nicked my pension in so many ways, can't wait for him to be homeless.
Joe.
- Homelessjoe, England
