Rental guarantee – Unseasonal rise in UK mortgage lending in December

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UK mortgage lenders injected 20% more finance into the property market in December year-on-year, which stopped house prices tumbling faster than the 0.2% recorded in January.
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Property prices fell 0.2% in January as the annual rate of decline accelerated to 1.4%, LSL Property Services reported.

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David Brown, commercial director of LSL Property Services said this was driven by growing concerns among property buyers about the global economy and the eurozone.

“But despite this fear among some buyers, mortgage lenders have shown commendable confidence, injecting almost 20% more finance into the market in December 2011 than they did at the same time last year. This has prevented prices falling further in the last few months.”

He added that the market is being buoyed by cash buyers especially for high-value properties in the South-East.

“As a result, prices in London have bucked the national trend, not falling in any of the last six months, and growing annually by 3%. LSL Property Services also found that transactions were up 5.1% on the year, with the fastest rise in the North at 5.9% and smaller rises in Wales and London.

“Our research shows that transactions are being held back in areas where prices are rising by the limited number of properties up for sale, but that an excess of for sale property in other regions has had the opposite effect.

“Sellers in areas where prices are growing are therefore charging a premium due to the scarcity of properties on the local market and buyers elsewhere have an excellent opportunity to secure affordable properties.”

Source: http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2145477/mortgage-lenders-lent-december-2010

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