Friday, Mar 02, 2007
Mortgage demand high again
BBC News: Mortgage approvals 'bounce back'
The property market is continuing to exhibit growth at similar levels to last year, according to figures released by the Bank of England. This comes despite comments from the Nationwide Building Society saying demand is 'waning'.
Posted by jellycaster @ 08:49 AM (147 views) Add Comment
8 Comments
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1. paul said...
More rate rises needed then.
2. denzil said...
This news does not surprise me. I'll always call a spade a spade as opposed some other garden implement such as a small trowel and I can without doubt say that after two years of stagnation around my area (Somerset) the market has been hot for at least the last 6 months. Since Christmas supply has improved but properties are literally selling in days. The rate increases have seemed to fuel the market around my way. It staggers me and adds to my perception that a crash certainly wont be this year.
3. dohousescrashinthewoods said...
Could it be a "prestige" thing too?
The more expensive something is the more people want it because being able to afford it is a status symbol (e.g. fashion brands).
The higher prices go, the more people want houses, partly to avoid being locked out forever, but also partly because they feel rich if they can afford one?
When sentiment turns, the "brand effect" breaks and it goes from being a status symbol to "a bit tacky" and "a waste of money"?
4. mrmickey said...
I think there's also a psychological thing going on, the more successful you are the more wreckless you become with your investments, this what is happening in the housing market house prices have gone up for some time now so people assume they will go up for ever they think this is the new reality and house prices never go down. The housing market has become like a racehorse that has won it's last 10 races people think it will never lose so they put the kitchen sink on the thing.
5. sovietuk said...
Evidence that the feeble stooges on the MPC are doing little to stem the horrendous increase in money supply. The fictitious UK economy is not run for long term stability but instead to satisfy the corrupt short term wishes of the unpleasant crooks running the show (Gordon B et al). There are very high penalty charges for a credit card that goes well over its limit.
6. Shipbuilder said...
I think that the biggest thing pushing the market up now is the belief that interest rates have peaked. Yes, houses are overpriced and yes, people are overstretching, but they are thinking - "I can put up with the mortgage pain for now, until next year's pay rise/interest rates come down/inflation eats the debt. The press say interest rates have peaked, inflation is down, the economy is strong, my job is safe, houses are going up, so I can't afford not to"
Most people don't follow the economy in detail - they listen to the media and a financial adviser, possibly. In their shoes, it makes perfect sense.
Reality is unimportant - as long as this sentiment continues, houses will continue to rise and the whole thing becomes self-fulfilling. Old affordability levels are out the window - people are willing to pay 60%+ of their income on mortgages becuase they think it is short term pain worth taking.
Sadly for us, in this scenario the only thing that will cause a crash is economic upset - sentiment does not seem to be changing.
7. Northern Lad said...
soveituk.....I totally agree!
8. Ilejustwait said...
i would think that people are trying to find the best deal on there mortgage and swapping over lenders to save money, i dont think that they are all new mortgage so this is hardly an accurate peace of info, just a load of bla bla bla ,