Monday, Mar 29, 2010
Where is the spring bounce?
Reuters: Mortgage approvals hit 9-month low
Mortgage approvals fell to their lowest level in nine months in February, Bank of England figures showed on Monday, in another sign that the recovery in the housing market is stalling.
The Bank of England said mortgage approvals numbered 47,094 in February, down from 48,099 in January and well below the figure of almost 60,000 reached in November when people rushed to take advantage of a temporary reduction in property purchase tax. Analysts had forecast a reading of 48,000.
Posted by waitingtobuy @ 10:20 AM (647 views) Add Comment
7 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. mark wadsworth said...
So we're significantly below the break-even number of new mortgages of 60,000 to 80,000 per month, which is needed for prices to be rising or at least flat?
2. uncle tom said...
In a 'normal' market, we should expect around double this number.
- so who's missing? - The genuine FTB..
The post college set simply havn't got the money to play, unless there is a rich seam of family cash available. Renting, meanwhile, does not provide a sustainable alternative.
Rents are currently uneconomic. For a residential property to yield a viable income, after all costs have been accounted for; the rent needs to produce a gross yield of 6% for an average property, very slightly less for more expensive properties, and significantly more at the bottom end of the scale.
This assumes the landlord owns the property outright, and that house prices track inflation - if he's borrowing money to fund his portfolio, the yields need to be slightly higher, and the downside risks to the current market make it a fool's game at any level.
In a stable, low inflation environment, mortgage costs and rents should be broadly similar.
It follows that if houses are too expensive to buy, they are ultimately too expensive to rent as well.
3. mark wadsworth said...
UT. I'd agree with most of that, except shouldn't the very last sentence say:
"It follows that if houses are too expensive to buy, they are ultimately too expensive to buy-to-let as well."?
4. uncle tom said...
Mark,
You can put it either way..
5. Neil B said...
Interesting how the time scale of 9 months is used to lessen the fact that its the lowest number of sales EVER.
6. Neil B said...
@UT - its not just FTBs. Anyone that wants to remortgage or buy a bigger place is also excluded. The simple fact is that there is no more credit left to provide mortgages that meet the selling prices.
7. a saver said...
UT said 'In a stable, low inflation environment, mortgage costs and rents should be broadly similar'.
For an owner-occupier it's ultra-cheap to buy in terms of interest costs, as this is at present being subsidised by the rest of us.
So that is skewing the equation at the moment.
So my siblings are paying £30-200 per month to live in flashy detached homes while I pay £525 per month to live in a scruffy end of terrace.