Mortgage Lending jumps in March
Despite the usual lull in the property market in a general election year it seems that buyers are still out in their droves. Figures released by the Council of Mortgage Lenders (CML) show that mortgage lending grew in March and is expected to continue growing over the next couple of months. This would seem to show that the property market is continuing its recovery and the usual election jitters have been shrugged off by buyers. Normally the property market enters a phase of reflection when a general election looms but this doesn't appear to be happening in 2015. As far as buyers are concerned everything points towards house price increases and the longer they leave it the more expensive it is going to be for them to buy a home
Mortgage lending jumped from £11.5bn in March which was an increase of 3% on March 2014. Economists at the CML have said that the change in stamp duty has helped the property market but that house sales were still well below the high of 2007. With the gradual improvement in the general economy we can expect to see further improvements in the housing market as wages rise and more jobs are created. The market usually picks up at this time of year and this year is no exception.
Buyers Have Returned After Christmas Slump
Despite the Christmas slump buyers have returned to the market over the last month or so. According to the National Association of Estate Agents the number of people putting their homes up for sale jumped in March and that the number of homes that completed in February went up to 58,000 which is a 15% increase from January. The CML did go on to say that this figure was well below the 85,000 completions that took place in January 2013 underpinning the claim that not enough homes are coming onto the market which is why prices are shooting up.
The CML has also said that whilst the market is showing goods signs of recovery there was a big problem looming on the horizon because banks and building societies will soon have to repay the £300bn of emergency funding that they received from the Bank of England during the financial crisis.This money was lent to the UK's banks and building societies via the special liquidity scheme and credit guarantee scheme at the height of the banking crisis. This money has to be repaid and it is likely to have an affect on lending going forward. Lending is likely to be rationed as banks look to repay these loans.
Government Continues With Buyers Incentive Schemes
Other incentive schemes have been introduced by the government which has helped the housing market. The government recently temporarily abolishedof stamp duty for first time buyers up to the purchase price of £250,000. This means that first time buyers purchasing a flat up to £250,000 would be able to save £2,500 on stamp duty.
There is still the problem that buyers have to put down very big deposits in order to get the best mortgage deals. Typically the best deals are only available if you have a 25% deposit. Mortgages are much more expensive if you only have a 10% deposit as lenders continue to be risk averse. Only the buyers with the biggest deposits can access the best rates.