Tuesday, February 24, 2009

Laughably desperate

Mortgage approvals up in January

Tucked away in the article is the paragraph "Another effect of the low Bank Rate was a £2.2bn fall in personal deposits in January. The BBA suggested that this was due to people moving their savings from ordinary savings accounts to alternative assets which offered bigger returns."

Posted by paul @ 12:30 PM (799 views)
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4 thoughts on “Laughably desperate

  • Odd choice of headline – mortgage approvals ‘up’. I think I would have said ‘down’ but then I am a glass-half-empty type of person.
    (The number of approvals in January was 43% lower than the same month a year earlier and the total net value of mortgage lending last month was £2.9bn, down from £3.3bn in December).

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  • Glass Half Full says:

    Sure, if you want to look for the negative in anything, I am sure you will be able to find many months last year, where lending was higher.
    What is important here is that more people than the month before went out looking to buy a house and I believe that this will continue in the coming months. All the doom mongers that want the market to keep falling, please just accept that in the same way that you proclaimed that what ever goes up, must come down, you also have to accept that things do in fact have to go up in the first place and will do so again. The end of the property price falls is in sight and we are approaching the trough.

    With savings losing money in the bank relative to inflation, house prices the lowest they have been in years and hyper inflation on the horizon with quantative easing already started, anyone with savings needs to put this money safe and a large asset like a house makes good sense especially if you get out of rented accommodation at the same time and negotiate yourself a good price.

    It is also worth remembering that for every first time buyer, an average of three extra sales take place. A thousand extra buyers and three thousand extra house sales result because of the chain that is created. It won’t take many people to turn house price falls into house price rises especially when you consider the lack of new build properties out there to kill the chains in the way they used to.

    The property market was the first thing to suffer and this pulled the economy into reccession. It might just be the one thing that digs it back out again.

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  • mark wadsworth says:

    “The BBA suggested that this was due to people moving their savings from ordinary savings accounts to alternative assets which offered bigger returns.”

    Possible, I suppose, but equally it might be people clearing out their ISAs paying 0.05% and paying off mortgages charged 3% to 5%. Aren’t mortgages being paid off rather more rapidly nowadays? So all that is happening is that both sides of banks’ balance sheets are being deflated slightly, which is what you’d expect to see in a deflationary/depression environment.

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