Property Market ‘Stuck In A Rut’

Gross mortgage lending in February was almost identical to that in January showing that the mortgage market has been flat so far this year.

The latest figures from the Council of Mortgage Lenders (CML) show that the mortgage market has remained unchanged so far this year as total lending in February was almost identical to that in January.

Although there has been a seasonal increase in house purchases recently, this seems to be lower than at this time last year. This is significant as early in 2010 demand fell as the stamp duty holiday expired at the end of 2009.

This indicates that the property market is still weak and in fact appears to be less buoyant than twelve months ago, with uncertain prospects for the rest of this year as CML chief economist Bob Pannell explains:

“There is little in the latest batch of market data that would cause us to revise our market forecasts for 2011, and nothing that alters our underlying view that this is going to be a challenging year for households and the housing market.”

“The housing market remains stuck in a rut and, while we do not anticipate much relief in next week’s Budget, it does present an opportunity for the chancellor to address the reform of stamp duty.

What we have instead is the introduction of a new 5% band. That is an irrelevance for the majority of home-buyers but another indication of the haphazard and arbitrary nature of this tax, where reform is long overdue.”