"While today’s figures show some improvement in the mortgage market, particularly on the approvals side, we are a long way off from seeing a sustainable turnaround in the fortunes of the housing market. The recent increases in house prices are built on shaky foundations and have been driven by short-term factors, with the supply of new properties coming on to the market still severely restricted.
"Anaemic mortgage lending serves to remind us that the housing market is still in a precarious state, and with unemployment continuing to increase, the fundamentals remain weak. Without an increase in lending, the housing market will struggle to embark on a sustainable recovery. Indeed, we expect house prices to dip in the first half of next year.
"At the same time, the threat of unemployment, fragile consumer confidence and a need to rebuild household balance sheets is causing consumers to pay back debt, with net consumer lending falling by £0.3bn in September and annual consumer credit growth slowing further to a new series low of 0.5%.
"Other data released by the Bank of England today show that the money supply (M4 excluding other financial corporations) contracted 0.9% in September, leaving it just 2.3% up from a year ago, despite Banks quantitative easing programme. With the programme of asset purchases due to be completed next week, weak money and credit data, combined with last week’s poor GDP outturn could induce the Bank to ramp up the asset purchases further at its monthly meeting next week."
For further details please contact:
Bijal TannaErnst & Youngmedia relations
+44 [0]20 7951 8837+44 [0]7957 342 975
Visit our ITEM Club pages to find out more.
Forgot User name or Password
Return to Login
For further details please contact:
Bijal Tanna