Crucial factors slow the pace of recovery
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PAUL SAMTER, ECONOMIST, COUNCIL OF MORTGAGE LENDERS
Husing and mortgage markets remain rather subdued and short-term indicators point to little underlying change over the early part of this year, despite a seasonal increase in lending volumes in March.
Reported house prices are fluctuating from month-to-month but appear broadly stable at the moment.
Looking further ahead, the new Stamp Duty exemption for first-time buyers purchasing properties under £250,000 could act as a modest stimulus to the market, but tight eligibility criteria mean it is uncertain how many people will benefit.
Meanwhile, the wider economic backdrop has improved somewhat. The economy ended last year with a little more momentum than previously thought and the first quarter looks to have seen modest expansion.
But while the outlook is for a gradual improvement later in the year, two crucial factors are likely to weigh on the pace of recovery for the economy and housing market.
Financial institutions still face the prospect of a funding gap when the official support schemes start to wind down next year.
And, regardless of the outcome of the election, the government will need to start tackling the public sector deficit, which will drag the recovery.
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