Home.co.uk
Home.co.uk

News: Weekly News Round Up - Housing Figures Offer a Little Hope

Fri, 12 Dec 08

Some small shards of light shone through the 'doom and gloom' in this week’s housing and lending market figures to give homeowners and potential buyers a glimmer of hope.

While the squeeze on credit continues and lenders continue to make mortgage deals less attractive the news that HSBC is to increase its mortgage lending business by around £2bn over 2009 was a welcome surprise.

The bank has announced that around  £15bn worth of loans will be available through UK mortgage deals next year, double 2007’s figure - see Home News 8 Dec 2008.

The move is especially surprising as HSBC was one of the few major banks not to be bailed out by the Government this year.

So who will benefit? A statement from Paul Thurston, HSBC’s UK managing director suggests that the bulk of homebuyers should not get their hopes up.

He said: “HSBC has no intention of closing its doors to customers, nor will we compromise our reputation for responsible lending."

The term “responsible lending” says it all, suggesting that this extra money will be only for those with the biggest deposits.

Another crumb of comfort arrived with the Council of Mortgage Lenders figures which showed that not only is mortgage lending increasing, but so to is the first time buyer sector- see Home News 10 Dec 2008.

Its figures for October show there were 39,900 home purchase loans, worth £5.5bn. This is an increase of 14% in volume and 10% in value from September. The number of loans to first time buyers is up even further, by 15% during the same period.

But the CML is urging homebuyers and homeowners not to get too excited. It points out that the annual decline in volume and value is still worryingly high, at 52% and 57% respectively.

Another factor to further dampen any sense of enthusiasm is that there is often a rise between September and October, when summer negotiations finally end in a completion.

Uncertainty over stamp duty may have also had an effect this year, with homebuyers putting off a decision to buy until later in the autumn.

In issuing these latest figures the CML continued its pressure on the Government to do more to free up funding in the sector. Michael Coogan, CML director general said: “Ultimately, the response of each lender – whether on commitments to follow base rate moves or to finance new business in the future - will depend on its access to, and the price of, its funding,” he said. 
The latest
Royal Institution of Chartered Surveyors survey of estate agents this week offered perhaps this week’s smallest glimmer of hope – see Home News 9 Dec 2008.

The number of estate agents that said prices were falling rather than rising in November was less than in October.

But with a reduction from 81% to 76.5% there are still three quarters of agents who are seeing price reductions on a regular basis. The figures also further dampen any hope of a recovery when they show that the average sales per estate agency during the three months to November was just 10.6, not even one sale per week and down from 10.9 the previous month.

Home sales are at the lowest since RICS started the survey in 1978 and in London the average estate agency only managed seven sales over the last three months.

Further details of the government’s mortgage rescue scheme, offering hope to struggling borrowers, emerged this week.

Called the Homeowner Mortgage Support Scheme it will homeowners the chance to defer mortgage interest payments for up to two years - see Home News 11 Dec 2008.

But even though around 75,000 households are set to face repossession next year, the scheme at best will probably only help around 9,000. That is the Government’s own prediction, but those such as moneysupermarket.com spokesperson Louise Cuming, believe it could be even less.

She is particularly concerned that the eligibility criteria released this week will put too many people off applying. The householder must prove they have lost income, be assessed for the scheme by a third party and have savings below £16,000 to be eligible.

She told the BBC that, “the list of criteria that must be fulfilled before borrowers are even considered means that few will qualify and even fewer will actually be granted assistance due to the fact it is voluntary on behalf of the lenders, who have only signed up in principle."

The Home.co.uk Asking Price report, released today, shows that market house prices are down a further 1.2% since November and 6% since December 07. However, the report also offers a glimmer of hope in that total number of home prices reduced whilst on the market in November was lower than for October.

 

By Joe Lepper

 

See also  - Mortgages, Asking Price Index, House Prices and Trends

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