Boe Mortgage Approvals: 38k

[Joey Buttafueco Jr]

Last month 32k (revised up from 31k)

[thedebtisreal]

Last month 32k (revised up from 31k)

20% rise. Interesting. Way lower than what is needed for price stability.

Expect this thread to include crowing bulls and plenty of bears using the phrase bull trap.

For me, I think its a sign that sellers are getting a little bit more realistic.

[Selling up]

Green shoots!

[interestrateripoff]

Need a breakdown of the stats.

What sort of LTV mortgages have been approved?

[Blue Peter]

Who's going to be the first to say, "falling prices on increasing volumes" or whatever the phrase is?

Peter.

[Bearfacts]

Qute a big jump BUT is this anything more than the usual seasonal pick up ?

have a feeling the threshold at which prices start to pick up is somewhere around 80-90 thousand - so still a very long way down - expect a pick up in VI ramping but further price falls for at least the next 6 months.

[drrayjo]

Who's going to be the first to say, "falling prices on increasing volumes" or whatever the phrase is?

Peter.

You

[SarahBell]

Maybe it's the MPs buying a few more houses on expenses?

[Rinoa]

Remember last week when BBA approvals increased and the bears said:

"...approvals aren't really increasing, it's just that banks are lending more and building societies less."

[Guest DissipatedYouthIsValuable]

Remember last week when BBA approvals increased and the bears said:

"...approvals aren't really increasing, it's just that banks are lending more and building societies less."

Remember when you were a reasonable human being rather than a conniving whore for bricks?

[Liquid Goldfish]

TBF, Rinoa did predict a substantial rise on January figures a couple of weeks ago, based on the NAEA sales claims - 33% rise IIRC was predicted - turns out to be 19% in the end

still down 68% from pre credit crisis levels in February 2007 of 116K, though

Edited March 30, 2009 by newdman

[cht]

Who's going to be the first to say, "falling prices on increasing volumes" or whatever the phrase is?

Peter.

You beat me to it.

[Bearfacts]

Actually thats what the BBA said.

Don't get too excited - I am sure this is purely seasonal - approvals still way down from levels at which prices might even stabilise. Prices still falling and will continue to fall - long way to go.

Incidentally why do you want prices to increase - are you an EA 'Speculator' or what ? Please state your interest.

[Bearfacts]

As I suspected the threshold is around 80,000 approvals to stabilise prices 6 months down the line.

Cut and pasted from BBC website :

"February's household borrowing figures suggest that housing market activity may finally have turned a corner," said Vicky Redwood at Capital Economics.

"However, approvals have a long way to go before they get to levels that are no longer consistent with falling house prices - in fact they need broadly to double

[the end is a bit nigher]

Who's going to be the first to say, "falling prices on increasing volumes" or whatever the phrase is?

Peter.

I will have a go.

But as we have said all along, the easiest way for houses to become affordable is for prices to fall. It really isn't that difficult.

[IDN]

Remember when you were a reasonable human being rather than a conniving whore for bricks?

thats a good start to the week

[HAMISH_MCTAVISH]

As I suspected the threshold is around 80,000 approvals to stabilise prices 6 months down the line.

Cut and pasted from BBC website :

"February's household borrowing figures suggest that housing market activity may finally have turned a corner," said Vicky Redwood at Capital Economics.

"However, approvals have a long way to go before they get to levels that are no longer consistent with falling house prices - in fact they need broadly to double

You're probably right, but I do recall seeing a chart on someones website that showed the levels of transactions required to stabilise house prices reducing the lower prices get. Can't recall the website address, but he's apparently a regular poster here and theres also some links to spread betting on prices? I think from memory the chart showed current levels would need to be about 55K per month to stabilise prices, but I could be wrong on that.

[thedebtisreal]

Remember last week when BBA approvals increased and the bears said:

"...approvals aren't really increasing, it's just that banks are lending more and building societies less."

I think you have to give this one to rinoa.

But the fact that 38k approvals is bullish news should tell you all you need to know about the state of the housing market. The number of approvals needs to double, which is eventually will prices continue their decline.

[mervyn]

This is clearly bad news for the bears, although not entirely unexpected. There are many factors which could be said to mitigate, like the fact that it is only one set of numbers, it is still historically very low and ltv rates have fallen significantly. However, I suspect the reality is that the housing market has improved since a few months ago, partly because the banking system is more stable than a few months back, and partly because the various government intitiatives and low interest rates are having an effect.

I guess it was pretty obvious the market would improve at some point. It was never going to be in outright collapse mode for 5 years as some people thought although it is still pretty dire and will probably remain so for some time.

[Rosepetal]

I don't think this is bad news at all. This is supposed to be the busiest time of year for house buying and yet it's still only 38k.

edit:grammer

Edited March 30, 2009 by Rosepetal

[Rinoa]

TBF, Rinoa did predict a substantial rise on January figures a couple of weeks ago,

I think you have to give this one to rinoa.

Why thank you.

Yes, approvals are way down from the peak. But turnarounds tend to begin with small improvements.

[Alfie Moon]

This is clearly bad news for the bears, although not entirely unexpected. There are many factors which could be said to mitigate, like the fact that it is only one set of numbers, it is still historically very low and ltv rates have fallen significantly. However, I suspect the reality is that the housing market has improved since a few months ago, partly because the banking system is more stable than a few months back, and partly because the various government intitiatives and low interest rates are having an effect.

I guess it was pretty obvious the market would improve at some point. It was never going to be in outright collapse mode for 5 years as some people thought although it is still pretty dire and will probably remain so for some time.

And what about the impact of 1 million more people unemployed by the end of the year and possibly another 1 million in the following 12 - 18 months after that? And if interest rates start going up significantly, as many economists are beginning to predict, - what then? Just how stable will this stability/improvement be?

Edited March 30, 2009 by Alfie Moon

[interestrateripoff]

Why thank you.

Yes, approvals are way down from the peak. But turnarounds tend to begin with small improvements.

Luckily there aren't more bad debts in the system then.

[FreeTrader]

These approvals numbers were released as part of the BoE's monthly Lending To Individuals update.

Two points from the latest data:

1) Total debt outstanding secured on dwellings has continued to increase, now at £1,227bn. Since house prices are falling, the debt-to-equity ratio of households with respect to residential property is increasing.

2) Total lending to individuals (mortgage debt, personal loans, credit card debt etc) continues to increase, now standing at £1,458bn. Since GDP is falling (probably even in nominal terms), the household debt-to-GDP ratio is increasing. The growth rate of household debt continues to exceed the growth rate of nominal GDP.

In short, despite being over 18 months into the credit crunch, the deleveraging of the UK household sector has still not yet begun.

[Rinoa]

And what about the impact of 1 million more people unemployed by the end of the year and possibly another 1 million in the following 12 - 18 months after that? And if interest rates start going up significantly, as many economists are beginning to predict, - what then? Just how stable will this stability/improvement be?

Recent govt. initiatives to start paying mortgage interest after 3 months unemployment rather than 9 will help reduce repossessions. And there are still many people in work on good incomes who are tempted to buy at current rates.

Interest rates will increase. But if lenders are offering 5 year fixes at 3.99% then the market is anticipating only very modest increases over that timescale.