From City AM:
MORTGAGE lending climbed rapidly through the third quarter and into October, two sets of data showed yesterday, as the Funding for Lending scheme finally appeared to be having an impact on lending. This came in tandem with a reversal in the downward house price trend of the past few months, revealed by another set of statistics.
The third quarter saw £4.2bn of buy-to-let mortgage lending, the Council of Mortgage Lenders said, an increase of eight per cent on the previous quarter. And the number of house purchase loans jumped ten per cent into October, hitting 54,713 on the Esurv mortgage monitor, the highest monthly rate since January this year.
And the housing market seemed to be showing “signs of life” (1) after this credit infusion – prices edged up 0.1 per cent on the month, according to LSL property services, making the average price 2.3 per cent higher than in October last year...
And data from Rightmove seemed to confirm this judgement about first-time buyers – who are set to make up just 25 per cent of the buyer mix in 2013, well below pre-crisis standards, commonly at around 40 per cent.(2) “The list of challenges to get onto the property ladder seems to be getting longer rather than shorter,” said Rightmove director Miles Shipside.
1) Great news! When prices are up, this is a sign of life! Would we apply this logic to the productive sector? Is it not considered a good thing that the real price of new cars has fallen by three-quarters over the past half a century, taking quality and longevity into account? Or does this mean that the car industry is on its last legs?
2) Not only are FTB's a smaller percentage, they are a smaller percentage of a much smaller number of buyers overall. It's called a buyers' strike. And of course, the banks prefer lending that lovely cheap taxpayer-subsidised "Funding For Lending" money to those who are already "on the property ladder", (those with large deposits) so if anything, this scheme, like all such schemes, tend to concentrate land ownership in fewer and fewer hands. Which is probably a blessing in disguise, because it concentrates mortgage debts in the same fewer and fewer hands, but hey.
Luxury Crackpottery
1 hour ago
2 comments:
"Great news! When prices are up, this is a sign of life! "
Yep, that is a particularly bonkers conclusion, even for the housing market. "Showing signs of life" is the amount of lending going up, i.e.more houses being bought and sold, as mentioned in the previous paragraph.
On the price rise = good news phenomenon, I suppose this is because houses are the one thing that the majority of peopl have and are likely to want to sell second-hand and which doesn't depreciate horribly, so that whereas all buyers are looking at a rise in price, almost an equal number of sellers are looking at a rise in value. Far more people buy second-hand houses than buy second-hand cars.
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