Residential Property Loan Advances Climbing or Falling During Last Month?

Some slightly inconsistent signals emerge from the mortgage lending statistics this week casting doubt on the immediate direction of house prices and the chance of owners achieving quick sales on their homes. On the one hand the number of mortgages granted increased again to 45,000, but the actual amount lent showed a small decrease.

The explanation seems to be that the deposits required by lenders, many requiring 25%, coupled with the recent reduction in house prices has caused a reduction in volume in spite of an increase in transaction numbers. If this is correct then the recent improved confidence about the bottoming out of house values does seem reasonable.

One additional explanation could be what might be classed as the “bargain buyer” effect. Once there is a general consensus that property values have reached the lowest point, buyers are brought back into the market to make a sound investment. Some of these may be investors or cash buyers who do not require a mortgage. In other words there may be an important number of property sale transactions which simply are not included in the mortgage approvals figures. These buyers will of course try to aim for those wanting or needing to Sell Property Fast.

Those seeking the bargains will generally seek out the best priced property in given areas, looking more for value for money than attractiveness. They will also barter with sellers to secure the best possible price. The effect of this is that a lot of the cheapest houses will be taken out of the market potentially in a very short space of time and buyers making a decision to buy in a few months time may come across a shortage of very cheap houses. That would be the time I’d decide on if I wanted to Sell my Property fast.

The likely consequence is that in a few months time the mass of available properties comprises more of the stubborn sellers, those who decided not to reduce selling prices to bring on a sale but who rather stuck to their guns and decided to wait out the market issues.

This may become clear in a short term upward improvement in property prices followed by the ideal gradual increase in line with inflation.

In any event the figures do now seem to point clearly in the direction of a stabilised housing market. The feeling is that those looking for a bargain will now have to get in quickly and complete a Quick Property Sale before a price recovery starts in earnest. Sellers will also begin to be confident about the chances of achieving good asking prices and will be prone to turn away very low offers.

As with any commodity, prices are established by supply and demand. As these levels stabilise there can now be said to be clear signs that the price falls have peaked and that the market has at least stabilised.