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 levels reached late last
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.