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Mortgage Lending Fell 5% In April - B B C

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Mortgage lending fell 5% in April, compared to April 2010.

Due to the good weather and the royal wedding say the CML :lol:.

Would that be the same good weather and wedding that "distracted" buyers but didn't distract sellers from putting their "properties" on the market? :P

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Would that be the same good weather and wedding that "distracted" buyers but didn't distract sellers from putting their "properties" on the market? :P

I think it was the same good weather that caused havoc with the market in December..... oh, hold on... :lol:.

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They really said it was due to the good weather? Oh that's priceless! So what is needed to sell a house is no weather. Anyone got any property on the Moon?

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Would that be the same good weather and wedding that "distracted" buyers but didn't distract sellers from putting their "properties" on the market? :P

However according to the BBC today here

"The warm weather and long bank holiday weekends prompted potential tenants to search for homes, said the group, which owns a lettings agents network including chains such as Your Move and Reeds Rains."

So we are being told that the weather is good for tenants looking for a place to rent but not looking for a place to buy? Have I got that right?

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So we are being told that the weather is good for tenants looking for a place to rent but not looking for a place to buy? Have I got that right?

getting there. It's not easy believing what you are told these days.

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my favourite of all time, years ago, was one VI blaming falling numbers of FTBs on uncertainty over the new Pope!

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From the CML press release

http://www.cml.org.u...edia/press/2928

At least it wasn't "unexpected!";)

Gross mortgage lending declined to an estimated £9.8 billion in April, down 14% from £11.4 billion in March and 5% from £10.3 billion in April 2010, according to new data from the Council of Mortgage Lenders.

A slight seasonal decline was expected as Easter fell in April this year. Coupled with the extra bank holiday for the royal wedding, it is difficult to gauge underlying trends with any certainty.

In today's market commentary, CML chief economist Bob Pannell said:

"Statistical noise, associated with extended holidays around Easter and the royal wedding, makes it harder to read the immediate market situation. This represents an unfortunate temporary loss of signal, at a time when it would be useful to gauge the resilience of house purchase demand to economic uncertainties and the pressure on household incomes.

"Levels of activity look set to remain broadly flat over the near-term. It now seems unlikely that interest rates will rise much, if at all, this year and this should help keep the market on an even keel."

Edited by koala_bear

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The full report:

http://www.cml.org.uk/cml/publications/marketcommentary

Market commentary 20 May 2011

The underlying performance of the economy is better than the Q1 GDP figures suggest, although consumer spending appears to be pretty flat.

Despite re-kindled inflationary pressures, the prospect is for interest rates to start rising more slowly than seemed likely a few months ago.

The immediate direction of house purchase and remortgage activity is uncertain, but there are few signs of the housing market stalling.

Economy

The current economic situation is less than clear.

The preliminary estimate of 0.5% GDP growth in the first quarter suggests that the UK economy did no more than recover the ground lost due to bad weather in Q4 and that the underlying position has been more or less level since the middle of last year.

This paints an unduly negative picture, not least because there are problems with the reporting of construction activity data. Stripping away these, and the distorting effects associated with the harsh winter weather, the underlying picture is likely to be one of moderate but not spectacular economic growth. Unfortunately, we will not know this for sure for some time, as Q2 growth figures will potentially be affected by erratic construction figures and the reduced number of working days as a result of extended holidays around Easter and the royal wedding.

A modest pace of economic growth is disappointing, given the depth of the recession that we are recovering from. Meanwhile, the slowing pace of growth in the manufacturing sector, revealed in the production figures for March, provides a powerful reminder that the rebalancing of the UK economy will not be an easy nor automatic process.

We do not yet have a reading of overall consumer spending for the first quarter, but real incomes are falling and households are under pressure. The increase in mortgage possessions, to 9,100 in the first quarter, illustrates this, albeit that the move was fully in line with industry expectations.

All the constituent parts of the long-standing GfK NOP index of household confidence fell in April, dragging the overall index down to historic lows, consistent with flat spending.

The uncertain nature of the UK's economic recovery makes it difficult for the Monetary Policy Committee to judge when to increase its base rate. The Bank of England's May Inflation Report anticipates stronger short-term inflationary pressures. Its central projection - for inflation to reach 5% later this year and to remain above its 2% target throughout 2012 - seems entirely plausible. The surprise increase in headline consumer price inflation in April to 4.5% has quickly displaced the surprise drop the month earlier, and higher energy costs and related utility bills seem likely to add to pressures in the second half.

Reflecting the Bank's view that temporary factors are driving much of the UK's inflationary pressures, its medium-term prognosis for consumer prices has not changed materially. Indeed, its projections are predicated on a ¼% rise in base rate in Q4 and roughly similar increases each quarter through 2012 – a somewhat gentler upward profile for interest rates than seemed likely a few months ago.

Housing and mortgage market activity

While the weak economy provides an unhelpful backdrop, seasonal factors meant a pick-up in activity in March.

Gross mortgage lending climbed to £11.4 billion in March, 22% higher than in February. Stronger remortgage activity continued to prop up the overall lending figures, as they have for several months. But house purchase activity – both sales and lending - was well ahead of the depressed levels of January and February, albeit sharply lower than a year earlier.

Chart 1: Gross lending

mc-may-2011.gif

Source: CML Regulated Mortgage Survey (April 2005 onwards), Bank of England

We estimate that gross lending fell back again, to £9.8 billion, in April, 14% lower than in March and 5% lower than a year ago. Taken at face value, the underlying picture is one of considerable weakness – revisiting levels seen briefly at the start of 2010, following the end of the earlier stamp duty holiday, and decade lows.

Both house purchase and remortgage activity appear to have been materially weaker, but we do not know to what extent each has been distorted by the lateness of Easter this year and the extra Bank Holiday for the Royal Wedding.

This represents an unfortunate temporary loss of signal, at a time when it would be useful to gauge the resilience of house purchase demand to economic uncertainties and the pressure on household incomes.

But nothing immediately suggests that housing demand is waning. According to the Bank of England, the number of house purchase approvals rose strongly in March to 57,000, with the underlying seasonally adjusted figure also edging higher.

This points to a reasonable level of activity in April. The latest RICS survey data appears to corroborate a stable, if subdued, picture. Its ratio of house sales to unsold stock has increased for the second successive month, while new buyer enquiries have finally shown signs of steadying. And while there continues to be a modestly negative reading for prices realised and expectations for the coming months, both are at their best levels since last summer. Broadly speaking, the national figures from Halifax and Nationwide – showing 1.4% and 0.2% falls in April respectively - are consistent with the UK experiencing a modest downwards drift of house prices.

With respect to remortgage activity, although the unadjusted approvals figure nearly touched 40,000 in March and was the highest for more than two years, the seasonally adjusted total eased back noticeably. We would not be surprised if interest in remortgaging wanes a little as expectations of higher interest rates fade and, as a result, activity tails off over the next few months.

Short-term prospects

Statistical noise, associated with extended holidays around Easter and the royal wedding, makes it harder to read the immediate market situation. But levels of activity look set to remain broadly flat over the near-term. It now seems unlikely that interest rates will rise much, if at all, this year and this should help keep things on an even keel.

The CML will be publishing updated market forecasts at the end of May.

CML Research

Edited by koala_bear

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Hmmm, the full report seems to be missing something.

We know the gross amount loaned out, how many mortgages though? It would be nice to know this then calculate the average advance and change in that average over time. Could be an important early indicator for us to digest. For some reason they hide their number of mortgages and mention a BoE figure!!

What are they hiding??

Edit to add: I'm sure I have seen this figure published in the past.

Edited by Caveat Mortgagor

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Hmmm, the full report seems to be missing something.

We know the gross amount loaned out, how many mortgages though? It would be nice to know this then calculate the average advance and change in that average over time. Could be an important early indicator for us to digest. For some reason they hide their number of mortgages and mention a BoE figure!!

What are they hiding??

Edit to add: I'm sure I have seen this figure published in the past.

You have...

This is the initial estimate for April, the other figures you saw were the actuals for march which have transaction volumes and lots of detail (I posted an analysis of the figures). Another 2 weeks till the final April figures with the detail are out.

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http://www.guardian.co.uk/money/2011/may/20/mortgage-lending-slumps

Mortgage lending slumps by 14%
CML says a late Easter and extra bank holiday are to blame for the reduction in mortgage lending
Mark "Not Related" King
guardian.co.uk, Friday 20 May 2011 10.49 BST
Mortgage lending plummeted in April to £9.8bn, down 14% from the £11.4bn advanced in March and 5% below the £10.3bn lent in April 2010, according to latest data from the Council of Mortgage Lenders (CML).
The organisation admitted that "taken at face value, the underlying picture is one of considerable weakness – revisiting levels seen briefly at the start of 2010". But it blamed the "slight seasonal decline" on Easter falling in April this year, coupled with the extra bank holiday for the royal wedding.

Face value is reality.

Nothing to do with the fact that FTBs are priced out and most people are happy to wait and see how much they are going to drop over the next few years.

Edited by Realistbear

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Easter and an extra bank holiday meant people forgot about househunting.

Can someone with a Guardian account post

"With more instructions, strange how vendors didn't forget about house selling."

Edited by exiges

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http://www.guardian.co.uk/money/2011/may/20/mortgage-lending-slumps

Mortgage lending slumps by 14%
CML says a late Easter and extra bank holiday are to blame for the reduction in mortgage lending
Mark "Not Related" King
guardian.co.uk, Friday 20 May 2011 10.49 BST
Mortgage lending plummeted in April to £9.8bn, down 14% from the £11.4bn advanced in March and 5% below the £10.3bn lent in April 2010, according to latest data from the Council of Mortgage Lenders (CML).
The organisation admitted that "taken at face value, the underlying picture is one of considerable weakness – revisiting levels seen briefly at the start of 2010". But it
blamed the "slight seasonal decline" on Easter falling in April this year
, coupled with the extra bank holiday for the royal wedding.

Face value is reality.

Nothing to do with the fact that FTBs are priced out and most people are happy to wait and see how much they are going to drop over the next few years.

That explains it then - after all it's only happened 78 times in the last hundred years.

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..."an unfortunate temporary loss of signal".... :lol:

...".nothing immediately suggests that housing demand is weakening".... :blink: ...

my bullsh1tometer just melted down.

"hello.. hello.. is this thing on? can anybody hear me?"

I get that feeling a lot when talking to people about the economy and house prices.

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  • 277 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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