Mortgage lending rose to a 25-month high of £13.4bn in August, according to figures released by the Council of Mortgage Lenders.
Gross mortgage lending increased by 6% from £12.6bn in July and by 10.4% from £12.1bn in August 2010. The August figure is the highest since July 2009, when mortgage lending rose to £14bn, and is the highest for an August – traditionally a strong month for mortgage lending – since 2008 when £19.3bn was lent.
But the CML's chief economist Bob Pannell still believes the market is muted: "Much of the recent variation in monthly lending figures appears to have reflected seasonal factors, with the underlying picture being one of activity levels that continue to be subdued but broadly stable.
"The August performance more or less offset the weaker than expected July figure. Taking July and August together, lending has shown little change on the same months of 2009 and 2010."
Richard Sexton, director of e.surv chartered surveyors, agreed: "The figures are a mirage and don't reflect the true state of the mortgage market. Vince Cable said yesterday we are in the midst of the economic equivalent of war, and lenders must feel like they are under attack from all fronts.
"They can't go on the offensive and start lending in greater volumes over the next few months while they are so busy defending against a barrage of weak economic growth and requirements to hold up to 20% capital. And an assault on so-called 'casino' banking will further limit the capacity of our major banks to increase their loan books."
He added: "As a result, they are focusing on targeting borrowers with big deposits, leaving lower income buyers in the lurch. Their higher loan-to-value products are nothing more than a low-volume smokescreen. Before 2008 more than one-fifth of all lending was to borrowers with a deposit of less than 15%, now it is less than a tenth, which gives a stark indication of just how suppressed the mortgage market is."
Howard Archer, chief UK economist at analysts IHS Global Insight, said it seemed possible that the stronger August figure was also boosted by homeowners remortgaging to take advantage of a modest dip in some mortgage interest rates. "The data do not point to any significant pick-up in mortgage advances for house buying," he said.
He still expects property prices to fall by 5% from current levels by mid-2012. "While housing market activity has edged up from its lows recently, there remains little sign of any real step up. It is possible that a lack of properties for sale could limit the downside for house prices going forward, but currently there is little evidence of a significant shortage."
Comments
20 September 2011 11:30AM
Yawn. Nothing to see here. Move along please.
20 September 2011 11:41AM
It is worth remembering the recession is a great time for the buy to let/developer brigade, especially wealthy individuals and corporations who can weather a down period, to hack and slash their way into family housing stocks.
Never a better time to buy...
Then when the wealthy decide they have asset stripped enough the recession will mysteriously end, prices will rocket , and the feudal wealthy will make out like the bandits they are.
Economies . like History, can be regarded as cyclical, repetitive , and even programmed.
We encounter economic crisis, expensive wars, on a regular , almost clockwork pre-planned basis.
Oddly , the wealthy always persist, flourish, and increase in wealth and power.
20 September 2011 11:42AM
Hurrah, George Osborne has saved us all! We are all going to be rich home owners. Yay.
20 September 2011 11:57AM
What no 'crashy, crashy' post yet?
20 September 2011 12:09PM
@Icarntbelieveit
Recessions are generally a great time to buy because there are plenty of forced sellers and finance is not widely available. However, this time there are fewer forced sellers due to low interest rates and the Government paying up to two years of mortgage interest. Combined with a policy of repossessing only as last resort this means supply of housing to the market is low.
House prices are still very high. No hoovering up low priced property for a guaranteed profit 5-10 years down the line.
Of course the best time to buy is not during the recession but at the beginning of the recovery whilst confidence is still low. This is some time away.
20 September 2011 12:18PM
Icarntbelieveit wrote
Then when the wealthy decide they have asset stripped enough the recession will mysteriously end, prices will rocket , and the feudal wealthy will make out like the bandits they are.
Isn't that because people who buy low and sell high tend to become wealthy?
20 September 2011 12:43PM
Can we all just agree that any posts mentioning 'crashy crashy' be referred to the moderator. Its getting boring now...
There isnt much information in the article really, but nonetheless these fragments of data receive a disproportionate amount of media coverage because deep down everyone knows that things are very fragile out there.
Remember always that the current global financial meltdown was precipitated because of house price speculation fuelled by reckless lending.
ps. A random snapshot of the 'real' housing market: my parents just sold their house in SW london to a cash buyer moving from Cambridge. SW London is the supposedly most resilient area of the country where everything is still magically bouyant. Theirs was a 4 bed riverside property - highly desirable - still it took 3 months to sell, they only had one offer, and had to drop the price by 40k (5% down from the inital asking).
20 September 2011 12:47PM
Misleading headline really.
If your running at say 30% sales volume compared to the peak in 2006, (....remember, happy boom time, money is free, borrow what you like, new car?, 2nd holiday? 2 fingered salute to the consequences someone else will pay...) your measuring an 'improvement' based on a market that is bumping along the bottom in a reeeealy bad state.
To be honest i am on the brink of capitulating, and ploughing my deposit into a home, but not without baking in a minimum of 10% reduction from asking price (the norm in my search area, ive got 3 bonafide examples) then overshooting by another 5%, which leaves me nicely in my comfort zone and able to absord the maelstrom that continues to pound us and will undoubtedly get worse.
All the while factoring in interest rate rises 'at some point' and the absolutley horrendous state of the UK economy. Im no Lib Dem but you have to respect the fact that they reflected the truth of UK Inc. finances yesterday, grim reading
If your thinking of buying now/early 2012, be bloody cheeky on asking price and dont budge, make sure you get a bargain and dont overstretch, because in Q1/Q2 in 2012 that 5% drop is going to be a reality.
NB/ Drop, not crash.... that happens we are all knackered.
20 September 2011 12:54PM
@Maxivory
Er no offense mate but 5% at 40K means your parents house sold at £760k.
Thats not the 'real' housing market is it, not when your folks house is more than 3-4 times the average value, though the sentiment that that there London is not immune to drops is a good call. Hmmm.
20 September 2011 1:18PM
If these figures include London, I'd like to see figures for UK without London properties included. I think that would give a more balanced picture.
20 September 2011 1:18PM
5% off asking price is normal, isn't it? I though the usually discount on asking was nearer 10%, a bit above 90% of asking price.
What it shows is what the "housing market" is mainly at the moment and has probably been for a few years now - a horizontal one. People with significant capital (or access to it) buying and selling to each other.
20 September 2011 1:22PM
We're selling on our properties to fund a trade up of our home.
One the market for less than two weeks and it's already gone at a 7.5% discount to the asking price. We'll see if the buyers come up with a mortgage, but the idea that there is a general demise of the property market is a myth - at least it is down our way.
20 September 2011 1:31PM
Quite. Thanks for that.
Now, back to the debate about UK house prices.
20 September 2011 1:34PM
Now, back to the debate about UK house prices
London. Biggest housing market in the UK.
20 September 2011 1:36PM
You'd have to REALLY need to move right now to take out a new mortgage.
Say you fix at 4.25% for 2 years on a loan of 200k (at a time when interest rates cannot conceivably go ANY lower) You'll be paying around 1100 per month.
What is your confidence that interest rates would be managable when your fixed-term ends?
What is your confidence that your property would be worth more when your fixed-term ends?
20 September 2011 1:41PM
Say you fix at 4.25% for 2 years
If you're worried, why not fix at less than 4% for 5 years if you can? Personally I would take the punt that rates aren't going to rise for another two years, so would take the benefit of variable for another two years before looking to fix.
20 September 2011 1:54PM
willb42
20 September 2011 12:54PM - well put!!!
maxivory 20 September 2011 12:43PM - ''Remember always that the current global financial meltdown was precipitated because of house price speculation fuelled by reckless lending.''
Not just the reckless lending - how about the ones borrowing? And in reference to the real housing market - it's just brick n' mortar and do you really think a bouyant market is one where prices keep rising or at the values you seem to think?!!?
Things go up and actually do go down!!! How about viewing what has been sold in terms of what it was bought for?
A bouyant market was once seen as one that is sustainable and affordable - but hey what do I know. These days anything goes - everyone out for themselves!
Apparently the housing shortage is a main culprit to the rise in prices!!! - with the old supply and demand speil. Reality: It started with the banks on the easy flow of credit and all of a sudden the average persons affordability levels rose!
At the end of the day - the reality is that prices have risen to such an extent that what was once considered a home or even a sensible investment is no longer seen as the norm.
There are those who would like to see a crash (or in real terms a drop) and others who would like to see a continuous rise in the price.
Prices are too high and have been un-realistic for over a decade.
If you bought between the 90's mini property crash and just after 2000 - then you probably would of experienced the rise in equity/property price and buying and selling afterwards would be fairly straight forward.
The demographic has changed as to the type of person who can afford to place a deposit.
Things have changed and I do not believe thhe changes are for the good for all.
20 September 2011 1:55PM
Not everyone is prepared to sell at a discount or enough of a discount, but I can see that in a falling or uncertain market sooner is probably the best time to sell. Its seems silly not to price competitively now rather than accept, possibly, an even lower price later on.
I have seen a fair proportion of properties sell in my area - but I have also noticed quite a few of them coming back onto the market a few months or even a year later. I don't know if these were all due to the sales falling through, but I know a number of people who have had trouble getting their mortgage sorted and have even had the bank turn around and suddenly demand a larger deposit.
20 September 2011 1:59PM
DONT PANIC! But someone has usurped Ambons cif profile!!
This is a FAR bigger revelation than the article headline... this is proper news.
Discount? You mean a reduction in price? I thought down your way the only way is up?
Surely this is the long awaited turn in the crowing/gloating on the value of homes.
Oh yeah and 10% off is the norm now.
20 September 2011 2:06PM
DONT PANIC! But someone has usurped Ambons cif profile!!
Perhaps we swapped with yours... ie:
To be honest i am on the brink of capitulating, and ploughing my deposit into a home,
Welcome onboard.
As mentioned, I am selling so I can buy a bigger home. The property being sold (not our home) backs on to a busy road, so it needs a discount to move it along - the fact it is slightly tarnished but sold within two weeks just belies the doom and gloom about the property market. Our home is on a quiet road and we were offered asking price from the first people who looked at it, but we're Gazanging on that one and taking it off the market. It will make a nice investment for my kids...
20 September 2011 2:12PM
Why, you're right. But then:
Spoke to soon.
20 September 2011 2:14PM
"Gazanging" .... great term. Had to be the first to put it in a post.
20 September 2011 2:31PM
If Uncle Lord Sir Mervyn stopped being cagey about interest rates and admitted they won't be going up for another 97 years in any way, you could all get on and spunk your money on over priced housing without having to worry.
All this 2 year fixed term crap when you can be pretty sure that you won't even be alive the next time they are above 0.5%.
Go on, trade up and get one of those tracker mortgages that pays YOU to have the debt AND the house value can only go up. You can then put your suspended mortgage payments and debt interest into BTL and be a billionaire by Christmas.
And if anyone is interested, I know of a 1p share that is guaranteed to go up to £1 each on a takeover. Minimum investment is £50k, send me a blank cheque, I'll fill it in to cash it and buy the shares for you. You can't lose.
20 September 2011 2:43PM
That's if the seller pulls out of the sale at the last minute. What is it called if the buyer pulls out at the last minute? How about Gazinging
Also:
Gazanger: A seller who pulls out at the last minute.
Gazinger: A buyer who pulls out at the last minute.
Ambon is a Gazanger. Let's hope the buyer of his noisy, tarnished, reduced house isn't a Gazinger. Although after the way he described it I'd certainly be doing a bit of Gazinging.
20 September 2011 3:10PM
Is OReally on holiday? Or is he moving house?
20 September 2011 3:36PM
Oh Ambon.
Please do not misconstrue my self proffessed nearing of succoming to property ownership, i am not doing it if i cant get ahead of the downward curve, also its a trade-off on currently attractive interest rates if you have a 40% deposit like moi.
If a large 3 bed semi is £150-200 less a month in mortgage payments than renting a 2 bed flat one road across then its a 'no brainer'. If it doesnt work out to my numbers i'll walk away, there will be other houses. Maybe even a corporate sale that needs someone cash rich and with no chain to jump on board (cue howls.... though, in defence i cite the "your home may be at risk if you cannot keep up mortgage payments")
Nice to see your tapping out and unloading some of the 'empire', your possibly not as blinkered and arrogant as your posts suggest.
20 September 2011 4:00PM
willb42
Your strategy and situation seems very similar to mine (although I'm in the Netherlands). We bought at 10% below the asking price of the most reasonable priced house we saw. Potential buyers can create their own HPC.
The market was never as overheated here (and there is a genuine supply problem similar to London) but I still believe the housing market has some way to fall. However, a hefty deposit and a 20 year linear mortgage (less than 3 times household income and repayments less than current rent) mean that we'll be able to weather the coming price falls unscathed (I hope).
However, unlike the overlevreraged idiots - some of whom post on this forum - I still have no vested interest in price increases.
20 September 2011 4:18PM
@Swampmongrel
Yeah we are not alone.
I just want decent home in a decent area thats commensurate and proportionate to the savings i have (through hard graft) and my salary, based on a degree level education (..and again hard graft), and i am not prepeared to eat beans on toast 3 nights a week, drive a rubbish car or forgoe the fun of the weekend for the priveledge of said home.
Regards the overleveraged who post here, one word...'gearing', oh dear... fun whilst it lasted though heh.
Right back to work, ive detracted slightly from my 'hard work' comment posting here today.
20 September 2011 4:21PM
@Jill
You seem to have a nose for a story. You should be a journalist.
What with Ambon bailing out and me contemplating diving in, these are worrying times indeed.
20 September 2011 4:30PM
Oreally
It's the start of unsticky unsticky
20 September 2011 5:28PM
Good grief, it's opposite day!
20 September 2011 5:54PM
I always said....
- buy for 20 years, and
- when the HPCrazies capitulate and buy, I may consider bailing out of property.
Oh, the delicious irony of some of the posts above.
Seriously, though, it was inevitable that the HPC's would capitulate and I applaud them for the grace in which they have done so.
However, most of you seem to have missed the point that I am selling to fund a new purchase... if I can ever find a property for sale in my area.
Gazang!
20 September 2011 6:00PM
Actually I think you've missed the point that we were never that interested in what you're doing Ambon. You ping about all over the place. Thought it was 10 years btw ? No matter. The point that some of the posters on here made was that with their hard - earned big deposits which you so despised they were waiting for favourable conditions, and voila ! here they begin... Good luck with your shares / portfolio / dealing / 10 year / 20 year / bigger property / going up in price enclave thing. Most other people want an interesting life
20 September 2011 6:25PM
The only way is up!
20 September 2011 7:16PM
Well, the comments are rather more interesting today! apart from blueytits' post that is ;)
Sorry but I've no news - I'm not selling or buying. Property is a "hold" for me.
20 September 2011 7:35PM
wow Jill, I realise you were trying for humour but your OReally comment was petty.
20 September 2011 9:13PM
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20 September 2011 9:46PM
It is official. I heart the property comments.
My purhase is progressing nicely by the way, 3 bed semi with 60ft garden in Brighton for half the price of local rents here I come.
21 September 2011 2:35AM
Why are people in England so obsessed with making money out of brick boxes that people have to live in? I want to hear continual "bad" news about housing.
I want all the parasites like estate agents and buy to let merchants to be completely ruined. Then I want laws to stop them exploiting the property market. So called "bad" news about housing is really good news.
21 September 2011 8:41AM
Why would you fix for 2 years at 4.25? You'd struggle to find a rate that bad.
21 September 2011 8:52AM
"Why would you fix for 2 years at 4.25? You'd struggle to find a rate that bad."
I didn't struggle at all, was on the first website I looked at... Santander ;-)
21 September 2011 11:01AM
So called "bad" news about housing is really good news.
Wow. I think I can taste the bitterness in your comments over the internet.
21 September 2011 1:00PM
houses too expensive. its not fair but in a modern capatalist economy why the surprise.
21 September 2011 3:45PM
I've just made an offer on a house at 5% under asking and been turned down today :(
I would offer more but that's all my money gone.
This isn't really of interest I know but I feel like you lot are my house buying buddies!
21 September 2011 4:11PM
I would offer more but that's all my money gone.
I am bullish as anyone... but I wouldn't worry. Sooner or later you'll meet your match. The current market will throw up panic sellers - you just need to be there at the right time.
21 September 2011 4:32PM
I'm sure you're right Ambon - I'm just so keen to get moved!
It's such a two tier market though (probably always is to be fair). I keep being told by agents that sellers will take low offers, this is true but only on crap. I just need some luck I guess. Maybe the people that turned me down today will change their minds in a couple of weeks.
21 September 2011 7:17PM
@RoseJelly
Remember that are a lot less buyers about these days, or rather a lot less that are able to proceed, so personally I would hold on (easy to say). You could always make sure you are friendly with their agent and sell yourself as someone who is really able to proceed and won't pull out. The agent will want their commission so should push the seller to accept. If they really want to sell then I'm sure they will accept.
21 September 2011 9:20PM
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22 September 2011 8:27AM
how sad. how twisted to want a home to increase in value. When there is enough land and materials to build a million. While still protecting the environment and being sustainable.
What is it about humans that make them do this to their own kind - Oh yes GREED!
22 September 2011 8:34AM
RIghtmove email quote - where I assume that the original price is typical of the way the younger generation are disenfranchised by a controlled commodity.
PRICE CRASH - MUST BE SOLD. Previously £350,000. BUDOCK VEAN is a DETACHED, 3 BEDROOM bungalow, with a GARAGE and off road PARKING, The property benefits from a pretty GARDEN, with VIEWS over Bridport. SPACIOUS accommodation throughout in good decorative order. NO CHAIN now £250,000