Wednesday, 29 October 2008

Bank of England mortgage approvals October 2008.

New data out for September 2008 here.

The usual commentary really.

Mortgage approvals for house purchase were 33,000 for September 2008 compared to 101,000 in September 2007 down 67%.

These are 1000 higher than August 2008 and must now signify the bottom of the approvals for home purchase.

EDIT - actually having thought about it a bit more this approval figure was before the recent banking crisis. I don't know anybody or any client who is now considering buying. So I predict that approvals will bottom at 20,000 in January 2009 and quickly recover to 35000 ish by April 2009, before a recovery to 80000 by October 2009.

Just goes to show how reckless the lending was. Gordon Brown was not the only irresponsible one here. Lenders have now adopted their old lending practices which include such crazy rules like-

checking incomes (barking mad)
capping borrowing at 4 times income (crazy tightness)
requiring a deposit (whatever next)
wanting to know how you intend repaying the mortgage (who thought that one up!)

If Gordon Brown wants lenders to lend again maybe he should mark all property down by another 20% and we can get on with sensible lending (see the 4 points above) on sensibly priced property.

If you are a first time buyer, your time is coming. Keep saving for your 5% deposit, because these deals will return in the later part of 2009. House prices will be down another 15%, mortgage deals will be equivalent to rent and the housing market will start a steady climb from Q4 2009.

Good luck.

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