Mortgage And UK Housing Markets Experience Fluctuations
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
Fluctuations in the UK Housing and Mortgage Markets
Summary
Recent figures released by mortgage lenders and property agencies reveal mixed signals in the UK housing market, yet analysts remain optimistic about future improvements.
Article
Rising Property Prices
According to Rightmove's recent survey, property prices are on the upswing, reporting the largest monthly increase in two years this February. The average asking price for homes in England and Wales now stands at £201,600. Rightmove attributes this rise to a scarcity of sellers and growing demand, particularly from buyers re-entering the market at lower price levels.
However, Miles Shipside, Rightmove's commercial director, advises caution. He warns that if sellers become overly ambitious, the recovery might stall as affordability issues resurface.
Contrasting Data from the FT House Price Index
The Financial Times House Price Index presents a more restrained view. It suggests that the recovery since autumn has been slow, and the market did not gain significant momentum at the beginning of 2006. The FT notes that while January's mortgage lending was lower than December's, it was higher than the previous year. They argue that their data, based on Land Registry figures, offer a more accurate market representation compared to bounce-prone figures from lenders like Halifax and Nationwide.
Interest Rate Speculations
Analysts are looking to potential government measures to boost sales. Howard Archer, Chief UK Economist at Global Insight, predicts an interest rate cut in early 2006. Moneynet, a mortgage comparison site, anticipates this cut could invigorate the housing market, prompting more people to explore mortgage options.
Ray Boulger, an independent mortgage adviser from John Charcol, also expects interest rate reductions. "I foresee at least two quarter-point cuts in the base rate this year, with house prices rising by about 5.5%," he noted.
Council of Mortgage Lenders Report
Recent data from the Council of Mortgage Lenders reveal a mixed picture. Gross mortgage lending in January increased by 32% to £23 billion, compared to £17.4 billion in January 2005, despite a drop from December's high of £26.9 billion.
Conclusion
While the reports show some contradictions, Howard Archer commented that the figures indicate an overall improvement in housing market activity. Rightmove's latest report corroborates this positive outlook.
Disclaimer
This article provides general information only and should not be considered financial advice. It is strongly recommended to seek professional and legal advice before entering any binding contracts.
Additional Resources
- [Financial Times House Price Index](http://news.ft.com/cms/s/1d089640-fb60-11d8-8ad5-00000e2511c8.html)
- [Moneynet Mortgage Comparisons](http://www.moneynet.co.uk/mortgages/index.shtml)
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