The CML in its latest market briefing says that even with continued signs of a cooling in the housing market, there is still the possibility of a renewed surge, early next year.
It says: “The housing market is so strongly influenced by confidence. Firstly, the BOE may take its foot off the brake too soon, and the strong economic fundamentals, coupled with lower than expected interest rates, may engender a revival in confidence and drive the market forward.”
However, the CML say there is now clear evidence of a lull in the housing market, after several months of tentative signs of a slowdown. Growth in the buy-to-let market has slowed significantly to just 3% in the first half of 2004. This coupled with the fact that less than £24bn of loans were approved during the month, which on a seasonally adjusted basis, were the lowest approvals for a year. Indications show that approvals will stay at this low level, and could even fall further, in August.
The CML says: ” With approvals a leading indicator of future lending, we expect to see significantly weaker gross mortgage advances in September and October.”