From 24 Dash:
New mortgage lending fell to a record low in 2010 and advances are expected to drop further during the coming year, figures showed today.
Net lending, which strips out redemptions and repayments, totalled just £8.15 billion during the year, down from £11.33 billion in 2009 and the lowest level since the Bank of England's records began in 1987. [wot?]
The market finished the year on the back foot, with net lending contracting by £298 million during December, as homeowners repaid more than lenders advanced.
As we all well know, changes in house prices are largely a function of how easy it is to get a mortgage of how much, and not changes in their intrinsic value. I linked to this over at HPC and Khards hit back with this beauty from MoneyWeek (I hope it shows up OK): 
Seeing as net mortgage lending is going to be plus/minus nothing for the foreseeable future, that does seem to suggest that there will be further falls in house prices for the time being.
What have we wrought in the UK?
8 hours ago
5 comments:
It is an odd commentary we have in the UK where more debt is seen as A Good Thing in the housing market as well as "business". Personally I think it's very sensible that people are deleveraging themselves.
it's the 'NET' I don't like. House prices will fall where people can't get mortgages or find buyers. So bad news for Public sector heavy areas like newcastle.
However in the South East, things won;t be so bad and in central london those sheikhs and bankers don't bother with thigns like mortgages when they are desperate to splash the cash.
Prices will go down, maybe over 10% on average, but average is useless in the national market. it does not inform one of whether to buy or not in a given area.
BE, indeed. But on Planet Home-Owner-Ist, if you borrow £5,000 to go on a holiday that is Very Bad And Naughty Debt and a sign that society is collapsing. If you borrow £200,000 to overpay by £150,000 on a new build flat, that is seen as Very Good And Responsible Debt etc.
CU, don't forget that the proportion of civil servants in London is the same as anywhere else, i.e. about one-in-four. And the ones in London tend to be the very well paid ones.
Would I be completely out of order to suggest that the house prices were kept aloft "falsely" by Gordon and Co to delay the inevitable? Another booby trap?
SO, yes of course, rising house prices is political manna from Heaven. Home-Owner-Ism is still so deeply engrained with Labour MPs that they are still peddling this nonsense. Not sure what the Measles Mumps & Rubella jab has to do with it, but hey.
But as far as the Lib-Cons are concerned, it isn't a booby trap, it just makes their job a bit more difficult - stopping a bubble from bursting is much trickier than stoking it in the first place.
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