Housing market strongest since 2008

21/03/13

By Jake Richards

The Council of Mortgage Lenders (CML) insists the housing market is in its best shape since the dip in 2008.

Despite seeing a reduction in the amount of mortgage lending, the group said there were plenty of reasons for optimism.

Loans worth an estimated £10.5 billion were advanced in February, a figure which represents a 1 per cent increase on February 2012, but 8 per cent down on the January figure. But the CML said the statistics were down to a seasonal slowdown and a "better than expected" result in January.

The lending body's chief economist Bob Pannell said: "If we strip out those periods when stamp duty concessions have distorted the picture, activity levels appear to be their strongest since the housing market buckled in 2008.

"There continue to be signs of improvement in activity and sentiment in the housing and mortgage market sector."

Mr Pannell said that figures showed that first-time buyers, a sector which has struggled to get mortgage access since the credit crunch, have accounted for about 42% of all mortgage loans handed out to home buyers in recent months.

The Royal Institution of Chartered Surveyors backed up the claim that the industry is looking more positive, saying that activity reached its highest level in more than two and-a-half years last month as confidence continued to return to the market.

Mr Pannell said: "The improvements in credit availability, risk appetite and pricing, as a result of more favourable funding market conditions and the Funding for Lending Scheme, appear to have nudged first-time buyer activity higher in recent months."

The CML said the Government should now extend its NewBuy scheme beyond 2015, with first-time buyers accounting for two-thirds of all the sales which have been completed under the scheme so far. NewBuy has 3,000 reserved new-build homes which can be bought with a 5 per cent deposit.

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