View more on these topics

Housing market starts to slow

The housing market is showing “tentative” signs of slowing down, according to Nationwide.

House prices have risen by their smallest monthly amount since March, and mortgage approvals appear to have peaked, the lender announced last week.

The picture is far from conclusive, with the Nationwide figures also showing that the annual rate of house price growth is now running at 24%, the highest since spring 1989.

House price to earnings ratio is almost back to its peak, also from 1989, which Nationwide says the market is “overstretched” and heading for a fall.

Last month&#39s 1.4% rise in prices lifted the average cost of a property to £113,665. This rise compared with increases of around 2% to 3% in the April to September period.

Nationwide group economist Alex Bannister says: “The housing market remains strong with prices up 6% over the last three months and sales up 12% year-on-year. However, October&#39s 1.4% rise was the smallest increase since March.”

Separate Bank of England data shows that the number of mortgages approved by banks and building societies is down from the highs seen earlier in the year. Bannister adds: “This, combined with weaker anecdotal evidence suggests the market may be beginning to cool.”

Affordability problems remain acute in the capital, where first-time buyers need to earn almost twice the London average wage to climb on to the first rung of the property ladder. By contrast, first-timers in north-west England need only earn 86% of the region&#39s average wage.

High-profile job losses in the finance and business sector may also be having a direct and indirect impact on the housing market in the south-east.

Bannister says: “However, interest rates remain supportive and could be cut further if the Monetary Policy Committee feared that its inflation target was at risk from a reduction in confidence in the housing market.”

Recommended

Woolwich accused of fee delays

Brokers are experiencing serious delays in the payment of procuration fees from The Woolwich.In the worst cases, brokers have still not received payment for cases that completed in May. At least two national broker organisations – who do not want to be named – have complained to The Woolwich.In a memo to The Woolwich last […]

New lender, Abacus says &#39you can count on us&#39

The mortgage industry will see the launch of its latest branded lender next week with the launch of the firm Abacus Permanent.Abacus, which will initially be funded by Bristol & West and Preferred Mortgages, will unveil a product range including full status, self-certification, buy-to-let, right-to-buy and adverse credit at the Mortgage Business Expo 2002, at […]

OFT weighs into cold-calling row

Mortgage intermediaries have been reminded by the Office of Fair Trading that cold-calling for leads for non-status customers is not permitted under its non-status guidelines.Proposals from the FSA to bring cold-calling under plans for mortgage regulation have left some brokers unaware of existing limits on cold-calling, in particular the OFT ban on cold-calling non-status clients […]

There&#39s still a way to respond to the FSA

The November 11 deadline for responding to CP146 is fast approaching. You have just seven days left to take stock of this mammoth document and reply to the 35 questions that the FSA want answered.Last year, just 0.15% of mortgage brokers responded to CP98. That document attracted just 19 responses from from a possible 12,500 […]

Newsletter

News and expert analysis straight to your inbox

Sign up