Positive Prediction for the Housing Market
The Council of Mortgage Lenders (CML) has predicted a more stable and “positive” year for the housing market in 2013. The group, which accounted for four in ten of all house purchase loans in October, has based its prediction on increased activity in the market. In total, there were 49,500 loans advanced for house purchase in October; this was an increase of 13.8% on September and was up 10.2% on October 2011.
Paul Smee, CML director general said: “If the incremental improvements in house purchase lending that we are currently seeing persist as we expect them to, then next year should feel a more stable and positive year in the housing and mortgage markets.”
Although first-time buyers still require an average deposit of 20% to get onto the market, the amount of money loaned to first-timers has increased by 19% in the 12 months until the end of October 2012. Experts suggest however, that this is merely the privileged few; the CML believes that only 34% of first-time buyers bought their home without the financial assistance of ‘bank of mum and dad.’ That proportion was cited at 28% for London.
It’s not all bad news for first-time buyers though; analysts believe that some of the building societies are looking to increase their lending figures and will therefore offer cheaper rates than some of the big banks. Over the last few weeks they have improved their first-time buyer rates, increasing competition between lenders.
High property value and difficulty in securing a mortgage may go some way to explain why house ownership numbers have gone down. A 2011 census showed that the figure has gone down from 68% to 64% (14.9 million) over ten years. Conversely, the number of people who rent their home from a private landlord or letting agency has increased from 9% to 15% during that period.
Sources: bbc.co.uk, cml.org.uk (image courtesy of thisismoney.co.uk)