Property Asking Prices and Gross Mortgage Lending Increased
Latest updates on average property asking prices showed a alight increase of 0.6% in July; while the gross mortgage lending rose by 17% to £12.3 billion in June, revealed by the Council of Mortgage Lenders (CML).
Report showed a slight increase in the average property asking prices across the county by 0.6% in July – standing at £227,864 from £226,436 in June; where the asking prices in 7 out of 10 regions recorded an increase, with East Anglia on the lead by 6.1%. The rise of property asking prices in July is as a result of the fifth rise in six months. Other than that, the gross mortgage lending in the county has risen by 17% to £12.3 billion, which hits the 6-month high of mortgage lending since December 2008.
All these figures appear to illustrate signs of recovery within the market. However, it is still being warned that the economy is still weak under the current condition.
1) The property asking price is still 3.1% lower than the figure recorded in the previous year
2) The gross mortgage lending is down by 48% – from £23.8 billion last year
3) The quarterly lending figure for this quarter is £33.3 billion that stayed at the same figure as the first quarter, which is also the lowest quarterly reading since the first quarter in 2001
4) The Bank of England (BoE) has recently recorded a decrease in mortgage lending for house purchases and re-mortgage for two consecutive months, which the net lending to businesses in May has shown a fall by £3.4 billion in May
According to these figures and trends, the current economic situation still appears to be uncertain; where three possible scenarios can be resulted for the following months:
Under this scenario, there would be a further decrease in asking price – with a tight mortgage lending, high unemployment rate as well as an increase in repossessions within the market.
In this scenario, the price will stay flat and steady, while mortgage availability remains at this steady level.
Resurgence scenario suggests recovery of the economy, where the asking prices would go up further and the mortgage availability will start to pick-up considerably while the supply would remain to be limited.