UK Mortgage Approvals Growing or Shrinking Last Month?
Monday, July 6th, 2009 Subscribe To Our Feed
Some rather contradictory signs emerge from the mortgage lending statistics this week casting doubt on the present direction of property prices and the prospect for owners achieving a Quick Property Sale. On the one hand the numbers of mortgages agreed was up once again to 45,000, but the actual amount lent was slightly lower. But what does this mean if I would like to Sell my House Fast?
The reason seems to be that the deposits insisted upon by lenders, many of them requiring 25%, linked with the recent drops in property values has resulted in a reduction in the volume of cash lent in spite of an increase in transaction numbers. If that is the situation then the recent buoyancy about the bottoming out of property prices does appear justified, even though it’s still not the ideal situation to Sell House Fast.
One further reason could be what could be termed the “bargain buyer” effect. Once there is a general feeling that property prices have sunk to the bottom, potential purchasers are attracted back into the market to pick up what they consider to be great deals. Some of these may be investors or cash purchasers who don’t need a mortgage. In other words there may be a significant number of property sale transactions which simply aren’t reflecting in the mortgage approvals data.
Such bargain seekers will by nature seek out the lowest priced residential property in given areas, looking more for value than desirability. They will also bargain hard with sellers to make the best possible deal. The effect of this is that many of the cheapest properties will be taken out of the market, probably in a very short space of time and potential purchasers coming along in a few months time may be faced with a lack result is that in a few months time the stock of availablehomes will be made up of more of the less flexible sellers, those who decided not to reduce selling prices in order to “Sell my Property Fast”, but who instead stuck to their guns and decided to wait out the current market difficulties.
This should be noticeable in a short term upward spike in property values followed by the much talked about steady increase in line with inflation.
In any event the activity levels do now seem to clearly point in the direction of a stabilised property market. The feeling is that bargain hunters will now have to jump in quickly before a price revival starts in earnest. Owners will also start to be bullish about their chances of achieving good asking prices and will be more likely to turn down very low offers, even if they dangle the carrot of a Quick Home Sale.
As with any market; values are driven by supply and demand. As these levels realign there can now be said to be unambiguous signs that the valuation dives are over and that the market has perhaps stabilised.
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