UK mortgage-lending "will turn around in 2011"
Wednesday, 16 February 2011 10:46 AM
A report covering property in England and Wales has expressed cautious optimism regarding the number of mortgage approvals that will be granted this year.
The Chesterton Humberts House Price Poll of Polls, which is coproduced by the Centre for Economics and Business Research (CEBR), said: "We believe that mortgage-lending will turn around in 2011 and will average around 50,000 transactions per month by the end of this year."
However, it also pointed out that "this is still less than half of the level of the pre-credit crunch era".
Douglas McWilliams, chief executive of the CEBR, said: "Affordability for first-time buyers will continue to grow as mortgage interest rates remain at record lows and house price growth weakens."
But the possibility of a rise in interest rates was cause for concern for Robert Bartlett, Chesterton Humberts' CEO, who said: "The real risk to the UK housing market will be rising interest rates. Any substantial increase in mortgage rates will put huge additional pressure on homeowners and have a potentially damaging effect on the reinvigoration of the UK economy."
The poll found that the slight recovery in mortgage approval volumes in November (which hit 47,000) gave false hope, because the figure subsequently fell to 42,000 in December.
The year ended with the worst month for mortgage approvals since March 2009, with December seeing the sharpest month-on-month drop since January 2010.
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