Steam left in 'housing train'
21 July 2004
The MarketPlace at Bradford & Bingley feels the mortgage market still has mileage left in it.
The Council of Mortgage Lenders revealed that mortgage lending continues to grow, with gross lending totalling a record £27.8 billion in June.
The head of product operations at the Marketplace, David Bitner, said: "These figures show that the housing train may have some steam left in it yet, but it also highlights how looking at monthly figures in isolation, such as May's subdued figures, can be deceptive."
He added: "While the property market has, for some time now, been predicted to slow down, people should be very wary about assuming this means a crash."
He believes the figures show that the market will continue to grow. To explain this he pointed out that, despite recent interest rate rises, rates are still historically low, as are unemployment levels.
Additionally, the average household spends considerably less on their mortgage than they did ten years ago.
Mr Bitner concluded: "While this continues, it seems alarmist to suggest anything other than growth. The uncertainty lies in when, and by how much, this growth moderates."
However, as far as first time buyers are concerned, Mr Bitner said: "The lack of first time buyers entering the market continues to be of concern."
Pre-2002, first-timers accounted for at least 40 per cent of the market each year, but this had fallen to 27 per cent by June this year.
"No first timers means those looking to move from traditional first time buyer homes are struggling and the implications obviously continue up through the housing chain," Mr Bitner noted.
To help first-time buyers, The MarketPlace has produced a booklet entitled "Helping you buy your first home", which offers information on the range of specialist mortgages available.