Monday, February 1, 2010

Good news at last!

Number of new mortgages falls for first time in 12 months as experts warn house price boom is over

The number of mortgages approved for people buying a home dipped during December, figures showed today. A seasonal dip in numbers saw a total of 59,023 loans approvals for house purchases during the month, down from 60,045 in November. There was also a fall in new mortgage lending. The decline in the number of mortgage approvals for house purchase follows 12 consecutive months of upward movement. Economists said the fall suggested the rapid rise in housing market activity, seen as prices recovered, may now be beginning to slow

Posted by waitingtobuy @ 10:59 AM (1751 views)
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14 thoughts on “Good news at last!

  • “But while mortgage lending was down, the amount people borrowed through credit cards, overdrafts and loans increased for the first time since June during December, the Bank of England figures showed.

    Total unsecured borrowing was slightly lower during the month than in November, but weaker repayments led to outstanding debt rising by £52 million”

    Borrowing to pay the mortgage?
    .

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  • ontheotherhand says:

    “This was still higher than the average of the past six months” says the BBC, never shy of finding some formula to spin a positive.

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  • The increase in credit card debt will just be people hitting the plastic for Chrismas spending.

    The fall in new mortgage borrowing is interesting. I wonder whether December’s figures were affected by the stamp duty holiday coming to an end ? I would have expeced the figure to peak in December before falling back in January. Maybe the peak was a little earlier.

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  • greenshootsandleaves says:

    Nice to see this story displayed so prominently on the DM website (smile). I don’t know whether my local supermarket sells any bear food but if it does I’m fairly sure that there too it’ll be on the bottom shelf.

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  • In the other news house prices will rise 20% and mortgage approvals will get to 90 000 from 59,023 which is almost double. At the current house prices and stimulus ending soon I will be surprised to see aprovals more than 45 000 unless the state and the tax payer takes over banks to keep the bubble going.

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  • 59k in December against 60k in November. Surely that’s effectively an increase. I can’t believe anyone buys a house in the last 2 weeks of December.
    IMO at best December is only a 3 week month for buying and selling houses. To that end I’d expect December No.s to be a good 25% below November, maybe more as people focus on Christmas from mid-December.

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  • Not sure how to post graphs but here’s a link to BoE mortgage approval figures showing seasonal and non seasonally adjusted figures in a graph a short scroll down.

    http://www.houseprices.uk.net/articles/property_transactions/

    The graph for Non seaonally adjusted figures clearly shows the end of each year (December) as being 30-50% below that of peak (spring summer).

    Therefore I’d suggest that if the figures in the article are non seasonally adjusted then December shows huge growth over past years against this years peak.
    So I wouldn’t start celebrating just yet if I were you.

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  • Adding to the above posts the Non seasonally adjusted figure should have been around 30-40k mortgage approvals.

    The figures are roughly 50% higher the summer following December so infact these figures could be read as a strong recovery ahead.

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  • Thenewdoctorwho says:

    Recovery ahead. Are we looking at the same graph?

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  • little professor says:

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  • Thanks LP

    I think that shows fairly clearly that there’s usually a significant dip in the month of December.

    Although looking at this graph it would suggest the figure for December 2009 is just over 40,000 Non seasonally adjusted and the figure they’re talking about in the article (although it doesn’t state it), is seasonally adjusted, which in this instance adds about 40% to the figures.

    Ah creative accounting at it’s best.

    BTW LP how do you post pictures/graphs on?

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  • str 2007
    I agree that seasonally adjusting the figures shows an upward trend, but adjusting for the end of the stamp-duty holiday is a bit of an unknown – time will tell.

    That Kalman filter house price predictor in the link you provided is interesting, but it’s only based on data since 1998 and as such just assumes that house prices go up a lot and that’s what they’ll keep doing. Isn’t that the kind of misuse of mathematical models that people on here spend a lot of time slagging off and blaming them for the mess we’re in?

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  • str2007:
    “how do you post pictures/graphs on?”

    If you use IE then right click on the image and select properties and then highlight the Address:(URL) by dragging the mouse cursor across it and copy it to the clipboard (Ctrl+C)). Go to the Comments box and paste (Ctrl+V) and you should see something like this:

    http://www.houseprices.uk.net/publish/graphs/mapprov_550x350_2000-2009_100.png

    Then you need to put some html tags around it. When you post it with the html tags around it, the image will appear in the comments box.

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  • Thanks PHD for he info, I’ll give it a go next time there’s something to post.

    I hear what you’re saying about the data. I was really just pointing to the fact you’d expect sales to be lower in December, the article was pointing to the fact things were dying a death, which I felt was a big prosumption given how close the number was to November sales.

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