In today’s market commentary, CML economist Paul Samter commented:
"As we look forward, we expect emerging signs of improvement as confidence in the economy grows and we move past the election. However, the need for the authorities to address fiscal deficit will inevitably slow the economy. At the same time the funding markets, while certainly better than a year ago, remain difficult and will likely limit the flow of available housing finance.
"Given the short-term weakness and distortions in the housing market, in addition to signs of more properties coming onto the market, it was perhaps unsurprising to see falls in some of the monthly house price indices in February. With activity unlikely to pick up much in the short term, we would expect to see further modest volatility in the coming months."
Stuart Law, Chief Executive of Assetz, said:
"As expected, the latest figures from the CML show that gross mortgage lending increased in February. This follows a brief pause for breath at the start of the year that can be largely attributed to the end of the Government’s stamp duty holiday.
“The latest data from the Assetz House Price Watch, an amalgamation of the five major UK indices – CLG, Nationwide, Halifax, Acadametrics and Rightmove, shows an annual house price increase of 7.6%, rubbishing suggestions of an imminent second dip in the housing market. Supply has been severely suppressed over the past year or so and there is little chance of the market being flooded with enough property to exceed the current level of pent up demand. While the rate of growth will slow over the course of the year, I still believe that 2010 will end with modest positive annual growth.”
Nigel Lewis, property expert at FindaProperty.com, said:
“The latest lending figures suggest that the housing market is back up on its feet after the lending lull that followed the end of the stamp duty holiday. But anyone expecting a return to limitless lending should note that the mortgage market is still very subdued and will remain so for some time to come. Nevertheless, home buyers are re-emerging slowly and this is set to continue given the strong demand seen on our site.
“This increase in lending is not a sign that house prices are about to take off. Prices are rising slowly, but only because of a restricted supply of homes for sale. There is unlikely to be a major influx of new money into the lending market to satisfy the demand for mortgages so unless there is a sudden injection of properties onto the market we’re likely to see continued gradual growth in prices this year.”
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