More housing surveys paint confused picture of market

A flurry of different housing market and mortgage surveys out today paints a mixed picture, with one saying that lenders are clamping down hard, another suggesting that mortgage applications have spiralled upwards although giving no clues as to the success rate, and a third saying that transactions have soared due to easier mortgage conditions.

According to e.surv, a valuations business which is part of LSL, mortgage lending conditions have been tightening. First-time buyer numbers are at their lowest for nearly a year, and lenders are focusing on larger deposits, meaning that approvals for loans where there is a deposit of under 25% have fallen.

The firm says it is wealthier buyers and the London market that are propping up the market as a whole.

Outside London, it says there have been large falls in the number of mortgage approvals – for example, by 11% in the North-West and 10% in the North-East.
 
Richard Sexton, director of e.surv, said: “Even throughout the summer when banks increased their lending to meet short-term targets and garner market share, high LTV lending was still painfully depressed compared to pre-2008. Now with the economy in peril from every angle, lenders are playing it safe and training their sights on wealthier borrowers.”

But according to the Mortgage Advice Bureau, the independent broker which operates out of estate agents’ offices nationally, the mortgage approvals drought has not stopped people applying. However, it does not give statistics as to the proportion of applications that are approved.

It says that the total number of mortgage applications processed so far this year is 20.6% higher than for the same period in 2010.

Total mortgage applications in the third quarter of this year were also 28.6% higher than the corresponding quarter in 2010.
 
The figures include remortgage applications, which were up 12% in September, compared with the month before.  
 
Unsurprisingly, borrowers are still having to put down sizeable deposits in order to secure mortgage finance. For example, in the South-East, South-West and East Anglia the average deposits put down by borrowers in September were £69,860, £55,776 and £48,539 respectively.
 
In London, mortgage applications (excluding remortgages) were up 72.1% in September compared to the corresponding month in 2010.
 
Brian Murphy, head of lending at MAB, said: “Unusually, activity in the first three weeks of September was running at a slower pace than in August. However, we saw a noticeable pick-up in applications, both home buyers and remortgage borrowers, in the latter part of the month.”
 
Meanwhile, the LSL Acadametrics survey, also out today, claims that house prices in September were down by just 0.3% on the month and that transactions rose 9.5% due to ‘cheaper properties and affordable mortgages’.

Acadametrics puts the average house price at £218,650, the highest of any of the surveys. It compares with the second highest, CLG, whose latest survey put August’s average house price at £208,476, while the Land Registry’s latest average price is £162,437. Both Halifax and Nationwide are broadly in line with the Land Registry.