Rise in Remortgage Approvals cannot lift Housing Market out of the Doldrums



housing

housing

The number of re mortgage approvals in the month of November is stronger than the most recent six month average, with more borrowers switching lenders when rolling over their fixed rate loans. During the month of November there were 27,045 approvals compared to 24,785 in October and 21,597 in November of last year.
However in the same month, mortgage approvals for purchases dropped to a 20-month low, with net mortgaging at a mere £1.5bn – it’s lowest since August 1999. In November just over 29,000 mortgages were approved compared to 30,689 in October, coinciding with a three-year peak of 45,740 in December last year.
A 31.7% year-on-year drop is highlighted by November’s mortgage approval data, which represents around half of the average monthly level of 58,513 seen since 1997.
IHS Global insight Economist Howard Archer, predicts a similar fate for 2011 with the cold snap adding to the misery; “Housing market activity remains stuck in the doldrums, which seems highly likely to maintain downward pressure on prices. In the near term, the bad weather will hinder housing market activity”.
The data reinforces economic beliefs that house prices will trend down gradually, and lose up to 10% of their peak levels by the end of 2011. Archer gave little hope to first-buyers when he said; “ In our view, the housing market has got little going for it at the moment, apart from low mortgage rates – and that is if you can get a mortgage.”
According to Archer, the sustainability of the economy and jobs in 2011, along with the amount of houses to come onto the market, will determine the development of house prices over the coming months.

Leave your comment

  • (not published)