Although the latest figures from the CML hint at housing market recovery, with homeowner lending up annually for the eleventh consecutive month, monthly data is more erratic and the volume of remortgaging remains down on a year earlier, with any positive trends set to reverse in the second half of 2010 and early 2011.
Evidence suggests that estate agents are already experiencing a slowdown in activity, while it remains to be seen what impact public sector job cuts and, at some stage, an increase in interest rates, will have on the market. The percentage of borrowers whose mortgages are on fixed rates has fallen massively over the last two years, so there will be little protection against any increase in mortgage costs when rates rise. Combined with increasing unemployment we will sadly see an upturn in people defaulting on loans and an increase in repossession numbers.
So, while on the surface, today’s figures are good news for homeowners, there are many underlying issues that threaten to destabilise the market. As conditions deteriorate, it is important that consumers and corporate vendors choose the right estate agent to ensure they recoup their investments.
