News Review
Growing confidence masks liquidity issues
the Bank of england’s deci- mand coupled with a smaller Lenders set out its case for meanwhile the cmL
sion to keep interest rates on number of properties com- continuing government sup- also revealed mortgage
hold at 0.5 % last month was ing onto the market has also port for the Special Liquidity lenders took 10,200
an encouraging sign for the helped to push up prices. Scheme and the credit guar- properties into possession
housing market. But all the signs are that antee Scheme, which must in the fourth quarter of 2009
consumer confidence has these relatively modest house be fully repaid by the ends of - 13 % lower than in the
been increasing for some price rises will start to slow as 2012 and 2014 respectively. third quarter, and 2 % down
months now with the lat- confidence grows and more But with a general election on the fourth quarter of
est research from unbiased. property comes onto the mar- looming it seems highly un- 2008.
co.uk showing the majority of ket, making the overall pros- likely that any decision would in 2009 as a whole, this
consumers believe that house pect for house price increases be forthcoming. brought the total number of
prices have passed their low- fairly flat for the year. even so, indeed, Bob thomas, of the possessions to 46,000. this
est point. figures from nationwide also cmL, said that recent rises in was lower than the cmL’s
With confidence on the show house prices through- house prices and improved most recent forecast of
up and both nationwide and out the uK in recovery mode access to new mortgages had 48,000, and significantly fewer
Halifax reporting an increase and unless there is a fall in obscured the seriousness of than the 75,000 forecast at the
in prices for six or more con- property values this month banks’ underlying liquidity start of the year - but still 15
secutive months, the doom- the building society predicts needs. % higher than the 40,000 in
sayers predicting a housing that annual house price infla- it is near impossible for 2008.
market crash may well be tion will move into double- lenders to retain existing in terms of payment
proved wrong. digit territory next month for books and create new ones difficulties, 188,300 mort-
Halifax reported house the first time since may 2007. while access to wholesale gages ended the year with
prices rose by 0.6 % in Janu- despite the relative calm funds is as limited. mean- arrears equivalent to at
ary, the seventh successive of bank base rate and steady while retail deposits cannot least 2.5 % of the outstand-
monthly increase and taking house prices Britain’s banks grow quickly enough to make ing mortgage balance (for
the average price to 9.9 % and building societies were up for the funds that are be- example, £2,500 or more
above its trough in april last warning that they will have to ing withdrawn. arrears on a £100,000
year. slash mortgage lending and “We are not suggesting that mortgage balance). this was
the uK’s low interest rate raise rates on home loans if government pours vodka in lower than the 195,000 the
environment has boosted de- the government insists on full the punch bowl. We are ask- cmL had anticipated, and
mand from those consumers and prompt repayment of the ing how government can get 3 % lower than at the end of
with a healthy enough depos- £300bn they have received in the patient to sober up with- the third quarter - but still 3
it (around 25 %) to enter the state support since 2008. out too much shock therapy,” % higher than at the end of
market. that increase in de- the council of mortgage he said. 2008.
Buy-to-let market more ronullst and arrears down nullnull
as the financial storm of For the previous seven those who fall into arrears down 37 % year on year.
the last 24 months begins to quarters there had been a as it gives them time to re- meanwhile the number
clear, it seems that the buy-to- consistent decline, as lending cover if they suffer any short of properties taken into
let market is once more be- dried up. in 2009, 93,500 buy- term voids in rental periods possession in the fourth
ginning to pick up. new buy- to-let loans were advanced or tenants hold back on the quarter has also fallen by 25
to-let lending increased for - 58 % less than in 2008 and rent. %, as many landlords benefit
the second consecutive quar- the lowest annual level since and as the wider econo- from reduced interest rates.
ter in the last three months of 2001. Last year they account- my begins to stabilize, or at the total number of buy-
2009, figures from the cmL ed for just 5.9 % of all lending. least begins to prop itself up, to-let repossessions remains
revealed. Low interest rates are the number of buy-to-let a small percentage of the
there were 25,800 new helping buy-to-let borrow- landlords falling into arrears market, at 0.46 % of the total
loans advanced in quarter ers keep their ship afloat. appears to be remaining book, similar to the annual
four, up from 23,700 in the the bulk of mortgages in roughly the same. rate for the residential mort-
third quarter but down from this sector are on an interest- Fewer landlords are gage market.
38,000 in the fourth quarter only basis which will be a struggling to meet mort-
of 2008. significant factor in helping gage payments, with arrears l see news review , page 8
4 mortgage introducer march 2010
MI p4-5_0310.indd 2 23/02/2010 10:55
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