The number of homes loans approved rose slightly in February, but any housing market recovery is still a long way off.
A new report by the influential Council of Mortgage Lenders (CML) found that
house purchase loans rose by 24,300 in February, up 4% on January.
However, this is still 47% below the same month in 2008 and CML director general Michael Coogan is warning that “spring has not yet sprung” for the housing market.
Fundamentals still look bleak
"Recent mortgage approvals figures published by the Bank of England show some signs of improvement at the beginning of the borrowing process, although activity is at a very low level historically,” says Coogan.
“We are not convinced that underlying trends have shifted sufficiently to change our forecasts for
mortgage market activity in 2009, but there are some positive signs for later in the year.”
In order to revive the housing market, Coogan believes chancellor Alistair Darling must his his April 22 budget to encourage lenders to commit more funds to the mortgage market.
Trackers down, fixed up
The CML survey also provided further indication that
tracker mortgages are waning in popularity.
With the base rate now at 0.5%, there is little room for further cuts. Add this to the fact that such deals are now tracking at up to 3% above base, and its easy to see why more people are beginning to look elsewhere.
According to CML, 56% of new loans are on a
fixed-rate, up from 49% in January, while trackers are down from 38% to 31%.
Expect to pay higher Registry fees
As if buying a house in this market wasn't daunting enough, the Land Registry has announced it is planning an increase to its fees, due in July.
The increases mean that the fee for registering a property worth £100,000 will increase from £100 to £130, while on a home worth £1 million the fee will rise from £420 to £550.
There will also be increases in fees for providing information, including official searches and official copies, with for example, the fee for a postal official search increasing from £6 to £8.
