Double boost for housing market

The bank of England has reported a rise in mortgage lending in its latest figures
The bank of England has reported a rise in mortgage lending in its latest figures

A DOUBLE boost of positive figures suggests that confidence is starting to return to the property market.

Mortgage lending rose by £1.6bn in January, twice the average for the previous six months, according to figures released by the Bank of England.

The increase, together with data indicating house price growth published by the Land Registry, suggests the housing market may be in the early stages of recovery.

Neil Hunt, of north Derbyshire estate agency Wilkins Vardy, said: “The Spring market has been encouragingly robust with the level of sales showing a significant improvement on this time last year.

“However, whilst we shouldn’t get carried away with any notions of increased prices, any fears of further falls this year can be allayed.

“The number of potential buyers entering the market has grown consistently and it certainly seems that there is some light at the end of the tunnel.

“We are looking forward with more optimism than we’ve dared for some time.”

According to the Land Regsistry’s latest figures, house prices in January were up 1.1 per cent compared to the previous month, making the average house price in England and Wales now £161,545.

There were similar positive signs from the Council of Mortgage Lenders who have reported that mortgage lending in January was 10 per cent higher than a year ago. Although a seasonal decline is expected, January was the sixth month in a row of higher year-on-year lending.

In their market commentary, CML chief economist Bob Pannell commented: “Housing and mortgage market sentiment has improved a little over recent weeks.

“The increase in lending compared to January last year helps support our view that housing and mortgage market activity may be boosted by first-time buyers seeking to complete deals before the stamp duty concession ends in March.

“Should inflationary pressures continue to fall back, the squeeze on household finances should ease progressively and help support stronger economic recovery going into the second half of the year.

“This can only be good news for the housing market further down the track.”