Good News for the Housing Market With More Homes Sold in September

Date: November 03, 2009

Both the Bank of England and the British Bankers’ Association (BBA) have reported an increase of 76.8 per cent in the number of mortgages approved for house purchase by the major banks showing figures at its highest level in 18 months.

The news of recovery within the housing market have also been affirmed by HM Revenue & Customs (HMRC), revealing an increase in the number of homes sold in the UK, with a reported number of 82,000 homes sold in September in comparison with 80,000 homes sold in August. HMRC adds that house sales in the third quarter of 2009 were 11% higher than in the second quarter.

Experts explain that the increase in house purchases is due to a number of factors including buyers having been attracted by more affordable prices, which are currently up to 15% below their peak value, combined with historically low interest rates which make mortgages more attractive, as well as incentives for first time buyers who are helped by a stamp duty holiday for properties up to £175,000.

However, some analysts have warned that the impact of the recession may well bring further falls in value of up to 5 per cent next year, due to expected high unemployment figures and the housing market being overvalued before the financial meltdown.

Howard Archer, chief UK and European economist at HIS Global Insight, commented “With housing market activity still at a relatively low compared to long-term norms, unemployment high and still rising, earning growth low and still falling, and house price/earnings ratios currently moving back up, we suspect that the recent firming in house prices will fizzle out before long”.

If you are considering entering the house market, given the favourable climate, consult OG for advice in mortgages and related financial services for contractors and freelancers.