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New data out for February 2009 here.
Mortgage approvals for house purchase were 37,937 for February 2009 compared to 67,000 in February 2008 and 116,000 in February 2007.
These have been bumping along a range around 30,000 since June 2008 which signified the bottom of the approvals for home purchase. There has been a jump up this month which is a move towards the 80,000 monthly transactions that is widely assumed to be needed for a normal healthy housing market.
A healthy market tends to have approvals in the range 80,000 - 100,000 averaged over the year, so we are currently around a third of the transactions.
I expect these approvals to move upwards now until February 2010, when I expect the approvals to be around 80,000 a month and a normal, healthy housing market to be restored.
As the housing market continues to fall, house prices will continue to become more affordable. I still stand by my prediction for the market to bottom in Q4 2009 although my £140,000 bottom (Halifax data) is looking like it might be challenged.
Monday 30 March 2009
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3 comments:
The housing market is dead in the water. Period.
The first 18 months of the falls has been solely due to the over-pricing of property in, for the first 9 to 12 months of falls, a healthy economy. Now comes the lag of unemployment and the doubts of people's job security and the future. I can see absolutely no floor whatsoever at this stage.
And as for £140,000 average price. Please, do me a favour. Prices will return to their historic levels - 3 to 4 times average wage. So let's say between £75,000 and £100,000 even if average wages stand still (and I think they'll fall).
Just look at the US market. Non stop falls in housing since January 2007 and still falling as fast as ever.
You cling to your prediction. I'll stick to mine.
What timescale do you have for your £75-£100k prediction?
Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness.
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