The Inside Edge
Figures released this week by the Council of Mortgage Lenders (CML) show an increase in mortgage lending for January compared with the same month in 2011. However, the expected seasonal fall led to a dip in lending compared with the previous month of December and the findings come amidst headlines cliaming that property sales have fallen.
The CML’s statistics show that gross mortgage lending for January finished at a figure of £10.5bn which represented a 12% fall from December and a 10% increase from January 2011. In addition, this was the sixth month in a row that year by year comparisons had shown an increase, but the CML qualified that fact by stating that very low levels were involved.
“The recent improvement in housing and mortgage market sentiment is welcome,” said Bob Pannell, CML’s chief economist.
“But we should be careful not to overstate its significance, given the very low levels of activity we are starting from and the protracted and difficult economic rebalancing that the UK and other countries have embarked upon.”
Any thoughts of positivity from these findings were quickly tempered, not only by Mr Pannell’s comments but by figures released by Her Majesty’s Revenue and Customs which show a fall in property for January. However, behind the headlines, there is the usual and completely anticipated New Year slump. Furthermore, sales for last month revealed the highest January figures since 2008.
Throughout the UK there were 64,000 property transactions in January 2012 in contrast to 86,000 sales in December 2011. However, compared with the January figures from a year ago, there is an increase involved of over 12,000.
This could be seen in some quarters as a significant rise but as we’ve already seen, some experts are telling us to expect misleading figures as the window for the entry level stamp duty waiver prepares to close.
The 1% level for properties between £125,000 and £250,000 will be reintroduced in March and it’s believed that the current rise in property sales as a year on year comparison could be sparked by a clamour to buy before the window closes.
“The increase in lending compared to January last year helps support our view that housing and mortgage market activity may be boosted by first-time buyers seeking to complete deals before the stamp duty concession ends in March,” Bob Pannell added.
It’s so tempting to look at these figures and search for long term positive signs but it seems that the real story for 2012 won’t even start to be told until the stamp duty waiver comes to an end.