House prices to grow by 4% this year say CML |
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Published
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Sat, 19 Mar 2005 01:00
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The Council of Mortgage Lenders (CML) predicts average house prices throughout Britain to grow by 4 per cent this year, but warned that the housing market slowdown is still continuing as mortgage lending fell sharply during February.
The CML said mortgage lending in February totalled £17.2 billion, slightly below January's figure of £17.3 billion, and 18 per cent lower during the same month last year.
| Similarly, the number of loans for house purchase fell from 63,000 in January to 59,000 in February, the lowest monthly figures since 1998, and that only 39 per cent of February's loans were for house purchases, the lowest proportion since May 2003, with lenders increasingly forced to rely on the remortgage business.
The data released by the British Bankers Association (BBA) also cut a sorry figure. The data showed its members made mortgage advances of £4.8 billion in February, but although this was £600 million more than in January, lending was 11 per cent down on the same month last year.
The falls reflect continuing nervousness about the state of the housing market, BBA said.
Halifax's figures also showed a 0.5 per cent fall in house prices during February, while Nationwide Building Society said the market was just 0.5 per cent up last month.
The CML's deputy director Peter Williams said: “February's poor lending figures were partly seasonal. Although we expect to see some pick-up in activity during the spring, neither transactions nor price increases will reach last year's levels.”
The BBA head of statistics David Dooks said: “February's mortgage lending was slightly higher than expected, but it was only marginally above the recent trend.”
Analysts said Gordon Brown’s recent Budget that announced stamp duty becomes payable on property purchases is expected to be of only limited help to first-time buyers
The continued stagnation in the housing market does raise some doubt over the CML claims and the question arises whether they are trying to kick start more borrowing to generate business for mortgage lenders.
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