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NEO72

Another Fall In House Purchase Lending Forecast

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This wasn't supposed to happen with Funding For Lending was it?

House purchase lending fell 7% in March – the third consecutive monthly fall, which could mean the property market has gone into reverse gear.

This prediction has come from national surveying firm, e.surv, part of LSL, using its own data.

The firm has a strong record in accurately predicting formal market data from the Bank of England, although its latest report is in conflict with one from Strutt & Parker and a forecast from the Item Club (see separate story).

However, according to another firm of surveyors, Connells, valuations activity picked up to levels not seen since March 2007.

According to e.surv, house purchase approvals fell from 51,653 in February to 48,200 – their lowest since August 2012.

February's figure was down on January's, and January's was down on the 55,266 figure of December.

Last year, there were five consecutive months of increases in house purchase lending between July and December.

There were 5% fewer purchase approvals than March last year.

If the e.surv forecast is correct, it will have been the first time since 2008 that house purchase lending has fallen between a February and a March.

Richard Sexton, director of e.surv chartered surveyors, explains: "The mortgage market is beginning to regress. It ended last year very strongly – with five consecutive months of increasing house purchase lending and more loans to first-time buyers – but lending has fallen during every month in 2013. One month could be a blip. Two months could be coincidence. But three consecutive months of falls in house purchase lending indicates the market has gone into reverse gear."

He said approvals declined for two reasons. First, appetite for moving home has fallen thanks to a combination of high inflation, weak growth of wages and rising house prices. Secondly, tough lending criteria are preventing many potential borrowers from qualifying for their desired mortgage – despite record low rates and a wider choice of mortgages.

EA today

Thought this bit was quite interesting:

According to Connells, valuation activity has grown for six consecutive months – which, taken in conjunction with e.surv's forecasts of lending, suggests that a growing number of mortgage applications are being rejected.

Lenders starting to get nervous?

Also, the CML have been busy ramping today, citing the increase in FTB's, although when you look past the spin, house purchase lending has been falling since November. Surely the pool of greater fools hasn't dried up already?

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The Help to Buy programme announced in the budget is a huge dis-incentive for anyone trying to sell a house this year. From January of next year, the government is going to be subsidizing existing home purchases. It makes no sense to sell now, knowing that you'll get a much better price next year, unless you absolutely have to. Osborne has locked up the housing market for this year, so that in the run up to the election they can tout the "booming" housing market of 2014.

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The Help to Buy programme announced in the budget is a huge dis-incentive for anyone trying to sell a house this year. From January of next year, the government is going to be subsidizing existing home purchases. It makes no sense to sell now, knowing that you'll get a much better price next year, unless you absolutely have to. Osborne has locked up the housing market for this year, so that in the run up to the election they can tout the "booming" housing market of 2014.

Hopefully the law of unintended consequences will kick in. A rush of supply to coincide with proceedable buyers could mean some real price discovery.

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He said approvals declined for two reasons. First, appetite for moving home has fallen thanks to a combination of high inflation, weak growth of wages and rising house prices

Bravo QE and the political and banking crooks.

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  • 243 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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