17 Jun

Home buyers gain in confidence

 

Lower borrowing costs and cheaper house prices have oiled up the housing market, helping purchases overtake remortgages for the first time since 2007.
The monthly mortgage index published by John Charcol revealed that
purchases made up 53.4% of the mortgage adviser's business in May. It averaged just 25% in 2008.
Enquiries for new business are also up. In May the proportion of mortgage enquiries for a purchase jumped to 59.7% from 49% in April.
"This suggests that as these enquiries translate into actual business the proportion of purchases in our business written will continue to rise over the next few months," said Ray Boulger of John Charcol. "It seems that the market is continuing to show positive signs of recovery."
Fixed rates are still popular as buyers look to lock in at historically low levels. Some 79% of the company's business was for fixed deals in May.
The positive sentiment is echoed by respondents to a Building Societies Association (BSA) survey who think property prices will rise an average of 1.4% over the next year.
That's a sharp turnaround from the 6.1% fall predicted in March and 7.1% slump a year ago.
The BSA's Property Tracker survey found that 59% of people agree or tend to agree that now is a good time to buy, up from 54% in March and 27% last June.
But Paul Broadhead, Head of Mortgage Policy at the BSA, cautions that improving job security will be key to any substantial recovery of the housing market.
A lack of job security was chosen by 61% of those surveyed as the greatest barrier to buying a home, the same as in March.
UK unemployment is at a 12-year high, up to 2.26m in the three months to April, the highest since November 1996. The jobless rate is up to 7.2%.
"People clearly recognise that with both property prices and mortgage rates having fallen, there are potential bargains to be found meaning that now is a good time to buy," says Broadhead.
"However, for many, concerns over job security mean that they are unlikely to actually go ahead and market." buy. They will need to see confidence in the jobs market return before they make their move in to property