Friday, January 21, 2011

“The near- paralysis of the mortgage market continues”

Fears for housing market as mortgage lending dries up

A fresh slump in mortgage lending triggered warnings over the "near-paralysis" of the market today amid mounting signs of ebbing confidence as consumers brace themselves for austerity Britain. Mortgage lending slid to its lowest level for a decade last year with just £136.3 billion advanced during 2010 - down 5% on 2009 - the Council of Mortgage Lenders warned. The £11 billion lent in December was the fourth monthly fall in a row and offers little hope for an imminent revival in a sluggish housing market.

Posted by jack c @ 03:11 PM (2390 views)
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21 thoughts on ““The near- paralysis of the mortgage market continues”

  • sibley's b'stard child says:

    “The dire figures came as corporate consultant Zolfo Cooper warned that consumers had cut back sharply on what they spend when they go out and retailers claimed an unwanted record with the worst December sales ever as the heavy snow kept shoppers away from stores.”

    Make your minds-up; either would-be consumers stayed-away of their own volition or were prevented from doing so by the inclement weather. You can’t have it both ways. Besides which, I recall reading that on-line purchases over December were strong, indicating that the snow didn’t necessarily prevent people from shopping. Furthermore, why would some retailers report gains despite the snow and others report losses because of the snow? Meh.

    http://www.guardian.co.uk/business/interactive/2011/jan/04/retail-christmas-2011-trading-updates

    “The only area to see a spending increase was gyms, where spending rose 1%.”

    I would hazard a guess that’s an annual trend as people gamely stick to their New Year’s resolutions for the whole of, say, a month.

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  • So are we saying that snow is a flakey argument?

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  • As Sibs says

    The snow is an absolute red herring with regard to low sales at Christmas.

    Knowone cancelled Christmas and no-one bought less food or presents because of the snow.

    If less was bought it was because less money was put into the budget for various austerity reasons.

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  • The most frivolous money has been attracted to London yet again in a vain expectation for the boom associated with 2012 Olympiad, in the form of yet again, yes, PROPERTEEE INVESTMEEENT. I think they will be rather quick to withdraw once the smell of profeering is gone. I can only envisage a huge dark hall in the place what was once known as London.

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  • I winder, umm WHO exactly ‘fears’ for the housing market?

    (ohh, estate agents … )

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  • this is the dilemna….if prices fall turnover will increase and agents work on no-sale no-fee so they should do better,however,I suspect they are individually embroiled in buy to let and are petrified of taking this stance

    I swear this whole market is going to collapse like a house of cards

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  • general congreve says:

    This comment is just a test to see if it comes out in italics! Either the blog is buggy or italics are the latest HPC trend.

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  • general congreve says:

    It’s confirmed it’s a bug!

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  • I can see the headlines in January 2012, “Mortgage lending increased in 2011, but house prices fell by 20%”. I expect to see a trend of more mortgages being approved for knock down prices over the year. Reality is going kick-in for those investors who didn’t already sell that they have missed the top of the market.

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  • Funny how it became italics after SBC’s comment… SBC you should try posting again and finish in bold. Then see if all the next comments are in bold…

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  • see if this works?

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  • and this?

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  • Oops

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  • Indeed

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  • Sibs & str2007 – good observations and here’s my thoughts. An individuals expenditure falls into 2 categories (1) essential expenditure and (2) discretionary expenditure where (1) consists of mortgage/rent,council tax, utility bills, insurances, food, transport (petrol) etc… whilst (2) consists of entertainment (cinema, football, theatre) holidays, luxury items etc.. (not a comprehensive list but you get the idea). The pressure is mounting more and more on the essential expenditure side of the household budget – infact I’d go as far as to say the Government has started “Tax” targetting essentials e.g the increase in insurance premium tax, fuel duty etc.. This means most households simply have less disposable income and this is before any real rise in interest rates – this might explain the drop in retail spending rather than attributing it to the adverse weather.

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  • Hello, what’s going on with this thread !

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  • sibley's b'stard child says:

    *With a nod to miken*

    I agree Jack, I would hazard a guess that discretionary income is being squeezed although the snow is an easy scapegoat. I must admit that i’m now beginning to see the effect of deflation (or is it stagflation?); ie static wages and inflated essentials

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  • Why?

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