CML: Global economic uncertainty could impact on house prices
Friday, 11 November 2011 11:59
New loans for both house purchases and remortgages fell slightly in September, according to new figures released by the Council of Mortgage Lenders (CML).
However, the organisation warned that economic uncertainty means that future predictions are “difficult to call”.
There were 48,200 mortgages taken out for house purchases in September, a fall of two per cent on August. The average deposit required by a first-time buyer was 20 per cent, indicating one of the central reasons why the housing market is stagnant.
The CML said that the cost of loans had begun to increase due to higher lending charges between banks. The banks own attitude to lending is being dictated by concerns over Europe. Potentially huge liabilities are forcing banks to hoard capital reserves, affecting levels of lending.
Paul Smee, director general of the CML believes the global picture makes it very difficult to predict future movements in the UK property market.
He said: "Although both house purchase and remortgage loans experienced a small drop in September the overall market to date shows a stable picture. However, the backdrop of global and domestic instability makes the future more difficult to call.”
There was an increase of 23 per cent on the number of homeowners remortgaging in the three months to the end of September, compared to the same period a year before.
The total number of loans advanced for property purchases was up by 16 per cent to 144,200 from the second quarter of 2011 and up by six per cent on the equivalent period in 2010.
Meanwhile, there was a slight fall in first-time buyers entering the market in September. The level of deposit required was unchanged from August but lower than a year earlier.
Loans for remortgaging in September fell slightly from the previous month.
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