Two new reports give a generally optimistic
view of the housing market, despite what some observers say is a pre-election
lull beginning to appear.
Firstly the Halifax Housing Market Confidence Tracker, which surveys how
people feel about the housing market, says optimism has rebounded amongst the
public.
February saw a rallying of house price optimism among consumers, from an
18-month low of +52 at the start of the year to +60 - even though the figure is
down from the lkevels reached late last year.
Halifax measures its house price optimism as the net balance of the
percentage of respondents that expect the average UK house price to rise over
the next 12 months less those that expect house prices to fall.
Low or no inflation, continued record low interest rates and the early
signs of higher take-home earnings have contributed to the feel-good factor
about house prices, the Halifax says.
Secondly the British Bankers’ Association says borrowers are becoming
more confident.
Gross mortgage borrowing in February was £9.6 billion - that’s actually
17 per cent lower than a year earlier but the association says house purchase
approvals are again “starting to trend upwards” because approvals generally
were higher than in January.
Mark Harris, chief executive of mortgage broker SPF Private Clients,
says some of the increase is down to government schemes aimed at helping
first-time buyers.
“While we don’t
believe that the lack of inflation will result in a cut in base rate, what it
does mean is that a rate rise this year is highly unlikely and could even have
been pushed back for 18 months to two years. Crucially, when rates do edge up,
the Bank of England has hinted that they will do so very slowly, eventually
stabilising at around 1.5 to 2.0 per cent - much lower than we have been used
to” he says.
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