Signs of recovery in the housing market as deals show rise again

Apr 15 2009 by Iain Laing, The Journal

Despite a deteriorating employment picture, the net balance of surveyors reporting new instructions to sell remains in negative territory, indicating that supply is still very tight.

RICS North East housing market spokesman and director at regional estate agency Rook Matthews Sayer, Richard Sayer said: “These figures are an accurate and heart-warming reflection of the uplift we’ve been witnessing in the region in the past three months.

“Buyer interest takes time to translate into sales and thankfully we are now witnessing this in earnest and in a way that we haven’t for the past 18 months.

“People are buying and selling houses again and we are seeing a healthy flow of new and sensibly priced stock on the market across the region.

“Homebuyers are also waking up to the fact that mortgages are now at their cheapest rates for 50 years and lenders are opening up their criteria to make loans more widely available.”

And the number of mortgages taken out by people buying a home rose by 4% during February. A total of 24,300 loans for house purchase were advanced during the month, up from 23,400 in January, the Council of Mortgage Lenders said.

But it warned that activity still remained very weak by historical standards, with mortgages taken out by people buying a home running at only around a third of the average total for February of 76,000 seen between 2002 and 2007.

There was also a rise in the number of first-time buyers getting on to the property ladder, with 9,400 mortgages taken out by people buying their first home during the month – 7% more than in January. But the figure was nearly half the figure this time last year.

The Bank of England published figures at the end of last month showing a 19% jump in the number of mortgages approved for house purchase.

But the CML stressed that although there were “some signs of improvement” at the beginning of the borrowing process, activity was still at a “very low level historically”.

Michael Coogan, CML director general, said: “We are not convinced that underlying trends have shifted sufficiently to change our forecasts for mortgage market activity in 2009, but there are some positive signs for later in the year.”