The housing market seems to be on the road to recovery, with greater consumer confidence helping push up turnover and prices. This is excellent news for anyone on the housing ladder and, with more mortgages around, first time buyers can celebrate too. In a fast-moving marketplace, expert help with finding the right mortgage is crucial.
The UK housing market, in the doldrums during the recession, is on the rise again. Key sources disagree on the exact figures: the Nationwide sees property prices up by 3.5% compared with a year ago, the Halifax suggests 4.6% and the Land Registry just 1.3%. Nationwide chief economist Robert Gardner sets out the background: “Demand for homes has been supported by further modest gains in employment, as well as an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures.”
The emergence of different figures from lenders and the Land Registry is unsurprising. This is a complex market and difficult to measure nationally, as homes are about as far from being a homogenous product as you can get, but the trend is clear. Your home, depending where you live as there are regional variations, could be an appreciating asset again, so if you are not already climbing the housing ladder it could be time to start.
Fortunately the mortgage market is coming back to life too – a situation with something of the chicken and egg about it, as a healthy property market is clearly dependent on a healthy mortgage market and vice versa.
The council of Mortgage lenders (CML) reported that loans to first-time buyers, frozen out of the market in recent years, hit 68,200 in the second quarter of 2013, the highest level since the financial crisis began in 2007.
Government initiatives, Funding for Lending and Help to Buy, are playing their part; and, with entry level borrowing up, the rest of the market is starting to discover it is possible to move onwards and upwards once more. This new demand, which the government says will not inflate a price bubble, has brought mortgage providers back to the market and some current deals look very attractive.
The brighter picture was reaffirmed by CML chief executive Paul Smee after a meeting with Chancellor George Osborne. Mr Smee said: “The mortgage market is open for business, and it is clear that government support has helped to create more favourable market conditions for home-buyers. Lenders, whether they chose to participate in the Help to Buy guarantee scheme or stay outside, will continue to do their utmost to meet households’ needs for mortgages, but always in a way that is responsible.”
Interest rates on home loans have recently seen all-time lows and forward guidance from the Bank of England suggest its 0.5% base rate will be around for a while yet, unless rampant inflation or financial instability loom. With an abundance of fixed rate, tracker and other varaiable rate products to choose from and government schemes to navigate, it is wise to take advice.