Telegraph - Economists hail first green shoots in housing market
The first "green shoots" of recovery in the housing market have been hailed by economists after figures showed an increase in the number of mortgages being taken out and property sales increased for the first time since 2007.
It comes as the number of new homebuyer enquiries rose for five consecutive months, with evidence showing that this is beginning to feed through to sales, according to the Royal Institution of Chartered Surveyors.
It said the number of new buyer enquiries increased at the fastest pace since September 2003 while the number of properties actually being sold by estate agents increased for the first time since November 2007.
Howard Archer, economist at Global Insight, said: "There are increasing signs that the housing market activity may have passed its worst point."
Ian Perry, RICS spokesperson, said: "The market is still in a fragile state but with demand continuing to pick up, there may be more signs of stabilisation in the coming months."
At the same time, the number of mortgages approved for those buying a new home also rose in February, according to the Council of Mortgage Lenders.
Numbers rose from 23,400 loans in January to 24,300 loans in February, a 4 per cent increase.
The number of loans approved to first-time buyers also increased by 7 per cent to 9,400 in February.
Michael Coogan, director general at the CML, said: "There are some positive signs for later in the year."
However, the lack of affordable mortgages remains "a barrier" to most first-time buyers who typically had to find a deposit of 25 per cent, a record amount, the CML explained.
But there was positive news for those looking to buy their first home as falling house prices meant first-time buyers borrowed less. The average first-time buyer loan was £95,000 in February, down from £97,000 in January and £114,000 in February last year.
The CML also highlighted a shift away from tracker mortgages towards fixed rate deals as borrowers looked to lock into historically low interest rates of just 0.5 per cent.
House prices fell last month by 2.3 per cent, wiping out the 2 per cent rise in January, bringing the average cost of a home to £160,327, according to Halifax.
RICS said the number of properties being sold by estate agents rose from 9.6 properties during the three months to February to 9.7 properties during the three months to March.
David Hawke, a RICS member based in Nottinghamshire, said: "There are some signs of "green shoots" but mortgage money is still tight."
And Benson Beard, a RICS member based in London, said: "The last month has definitely seen an increased in buyer numbers and agreed sales.
"We can all look forward to a tough year but one that in hindsight may yet signal the bottom of the market."
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Wednesday, April 15, 2009
Are banks profiteering?
Telegraph - The difference between the Bank of England's benchmark interest rate and the average rate on a tracker mortgage has risen from 1.18 per cent at the beginning of April last year to 3.20 per cent today, according to personal finance website Moneyfacts.co.uk
The Bank of England has aggressively cut its Bank rate from 5 per cent in October to a historic low of just 0.5 per cent in an attempt to revive the economy.
While existing borrowers with a tracker mortgage will be enjoying the drop in rates, new borrowers are being badly hit. HSBC has announced it is launching a tracker loan charging 4.09 per cent above the Bank rate.
The margins on the average two-year fixed rate deal has risen from 1.19 per cent above the two-year swap rate - which is the rate that lenders use to price their fixed rate mortgages – at the beginning of April last year to 2.41 per cent above the rate today, Moneyfacts said.
Despite two-year swap rates dropping by 3.03 per cent since the beginning of last October, the average two year fixed rate mortgage has been reduced by just 1.64 per cent over the same period, it said.
It comes after billions of pounds of financial support from the Government has been given to the banks during the credit crisis.
Andrew Montlake, of mortgage brokers Coreco, said: "Banks are taking the opportunity to widen their margins to claw back of the profits that they've lost during the credit crisis. Every time they launch a new range of deals, the margins seem to be even bigger, specifically on tracker rate deals."
The average rate charged on a two-year fixed rate deal is currently 4.64 per cent, compared with 3.70 per cent for the average two-year tracker, according to the research.
Michelle Slade, analyst at Moneyfacts.co.uk, said: "Since base rate started falling in October 2008, mortgage lenders have continued to increase their margins.
"While existing tracker customers have benefited, anyone looking for a new tracker deal has seen the margin over base continue to increase. The vast majority of providers have passed much bigger cuts to their savings rates, when compared to their standard variable rate as once again they increase their margins."
An HSBC spokesperson said: "HSBC's tracker mortgages are regularly the lowest in the market. Mortgage interest rates reflect the risk of lending in the market, in the current environment it is not surprising that they are higher than previous years."
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The Bank of England has aggressively cut its Bank rate from 5 per cent in October to a historic low of just 0.5 per cent in an attempt to revive the economy.
While existing borrowers with a tracker mortgage will be enjoying the drop in rates, new borrowers are being badly hit. HSBC has announced it is launching a tracker loan charging 4.09 per cent above the Bank rate.
The margins on the average two-year fixed rate deal has risen from 1.19 per cent above the two-year swap rate - which is the rate that lenders use to price their fixed rate mortgages – at the beginning of April last year to 2.41 per cent above the rate today, Moneyfacts said.
Despite two-year swap rates dropping by 3.03 per cent since the beginning of last October, the average two year fixed rate mortgage has been reduced by just 1.64 per cent over the same period, it said.
It comes after billions of pounds of financial support from the Government has been given to the banks during the credit crisis.
Andrew Montlake, of mortgage brokers Coreco, said: "Banks are taking the opportunity to widen their margins to claw back of the profits that they've lost during the credit crisis. Every time they launch a new range of deals, the margins seem to be even bigger, specifically on tracker rate deals."
The average rate charged on a two-year fixed rate deal is currently 4.64 per cent, compared with 3.70 per cent for the average two-year tracker, according to the research.
Michelle Slade, analyst at Moneyfacts.co.uk, said: "Since base rate started falling in October 2008, mortgage lenders have continued to increase their margins.
"While existing tracker customers have benefited, anyone looking for a new tracker deal has seen the margin over base continue to increase. The vast majority of providers have passed much bigger cuts to their savings rates, when compared to their standard variable rate as once again they increase their margins."
An HSBC spokesperson said: "HSBC's tracker mortgages are regularly the lowest in the market. Mortgage interest rates reflect the risk of lending in the market, in the current environment it is not surprising that they are higher than previous years."
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Mortgage rejections up fourfold
Telegraph - Nearly 9pc of vetted mortgage applications are being rejected this year compared to just 2.3pc in 2007, according to moneysupermarket.com.
The website said that all the applications were qualified against the lender's criteria prior to submission and on paper appeared to fit. However, lenders still found reasons to reject them.
"Credit histories play an important part in the process and any blemishes will make finding a mortgage increasingly difficult. All debt repayments – credit cards, loans, store cards etc – must be made on time. Details of all missed repayments are held on your personal files for six years and may count against you when your credit rating is accessed.
"Assessing affordability is key for lenders and everyone has to be much more realistic about what they can borrow. The most anyone can reasonably hope for is four times their salary – anything over this is more likely to be rejected. And you can't expect lenders to take overtime or commission into consideration when they assess affordability, they are likely to base the maximum lending purely on your basic salary."
Many lenders are advertising that loans at so-called 90pc LTV are available but mortgage brokers claim that applicants with a clean credit history are being turned down for the most minor of misdemeanours.
Matt Andrews of Money Workout, the mortgage broker says that the best buy rates give a misleading impression and that most borrowers will get the advertised rates, even if they meet the general criteria the lender has set.
"Lenders are being extremely picky and getting a deal with more than 85pc LTV is very difficult. They may be advertising great rates on mortgages of 90pc LTV and above, but the reality is that most borrowers do not qualify – even if they have a clean credit score – as lenders have got very tight on criteria."
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The website said that all the applications were qualified against the lender's criteria prior to submission and on paper appeared to fit. However, lenders still found reasons to reject them.
"Credit histories play an important part in the process and any blemishes will make finding a mortgage increasingly difficult. All debt repayments – credit cards, loans, store cards etc – must be made on time. Details of all missed repayments are held on your personal files for six years and may count against you when your credit rating is accessed.
"Assessing affordability is key for lenders and everyone has to be much more realistic about what they can borrow. The most anyone can reasonably hope for is four times their salary – anything over this is more likely to be rejected. And you can't expect lenders to take overtime or commission into consideration when they assess affordability, they are likely to base the maximum lending purely on your basic salary."
Many lenders are advertising that loans at so-called 90pc LTV are available but mortgage brokers claim that applicants with a clean credit history are being turned down for the most minor of misdemeanours.
Matt Andrews of Money Workout, the mortgage broker says that the best buy rates give a misleading impression and that most borrowers will get the advertised rates, even if they meet the general criteria the lender has set.
"Lenders are being extremely picky and getting a deal with more than 85pc LTV is very difficult. They may be advertising great rates on mortgages of 90pc LTV and above, but the reality is that most borrowers do not qualify – even if they have a clean credit score – as lenders have got very tight on criteria."
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Tuesday, April 7, 2009
USA plans to curtail risky mortgages
CAMBRIDGE, Massachusetts (Reuters) - A powerful U.S. lawmaker said on Monday he is preparing a broad package of legislation that would promote stability in the mortgage market by limiting future subprime lending, and would also take on executive compensation and limit systemic risk.
U.S. Rep. Barney Frank, who chairs the House Financial Services Committee, said on Monday he expects to hold hearings on this bill by the end of April.
"We will bring a bill out in April that will stop people from getting loans in the future that they cannot repay," said Frank, whose committee is spearheading the United States' efforts to battle the banking crisis. "It is important that we say you can't securitize 100 percent of anything."
Frank aims for the package to become law by the end of the year.
The Massachusetts Democrat said he did not propose to eliminate mortgage securitization -- essentially selling a loan to investors -- but said that allowing lenders to securitize the full value of a loan encouraged overly risky lending practices.
"We start with restricting securitization, not to the point where it stops," Frank said in a speech at Harvard University in Cambridge, just outside Boston.
His bill would limit the securitization of subprime mortgages, but Frank said his eventual goal would be to apply the no-100-percent securitization rule across the financial industry.
TO TAKE ON BONUSES
It will also take on the issue of executive bonuses in an effort to ensure that financial industry officials do not take excessive risks.
The aim is to do away with a culture in which, he said, "If you take a big risk and it pays off, you make money and if you take a big risk and it costs the company money, you break even."
He also said that U.S. regulators need to have the authority to wind down non-bank financial institutions, to avoid a repeat of the kind of market turmoil that accompanied the crises at Lehman Brothers and American International Group.
"No institution anywhere in the financial system ought to be able to get so indebted that it threatens our financial stability," Frank said.
His committee is also planning to limit credit card issuers' ability to impose penalty interest rates.
"We will have a bill that will be coming out that will say they cannot raise your interest rate retroactively on any money you already owe them, that if you make a payment of money you owe that they cannot allocate it to that part of your debt that has the lowest interest rate," Frank said.
The subprime mortgage business -- loans to less-creditworthy borrowers -- went into a sharp downturn three years ago, setting off the current world financial crisis. While activity in that business has largely ground to a halt, Frank said he is pushing legislation to restrict it in the future out of a presumption the market will return someday.
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U.S. Rep. Barney Frank, who chairs the House Financial Services Committee, said on Monday he expects to hold hearings on this bill by the end of April.
"We will bring a bill out in April that will stop people from getting loans in the future that they cannot repay," said Frank, whose committee is spearheading the United States' efforts to battle the banking crisis. "It is important that we say you can't securitize 100 percent of anything."
Frank aims for the package to become law by the end of the year.
The Massachusetts Democrat said he did not propose to eliminate mortgage securitization -- essentially selling a loan to investors -- but said that allowing lenders to securitize the full value of a loan encouraged overly risky lending practices.
"We start with restricting securitization, not to the point where it stops," Frank said in a speech at Harvard University in Cambridge, just outside Boston.
His bill would limit the securitization of subprime mortgages, but Frank said his eventual goal would be to apply the no-100-percent securitization rule across the financial industry.
TO TAKE ON BONUSES
It will also take on the issue of executive bonuses in an effort to ensure that financial industry officials do not take excessive risks.
The aim is to do away with a culture in which, he said, "If you take a big risk and it pays off, you make money and if you take a big risk and it costs the company money, you break even."
He also said that U.S. regulators need to have the authority to wind down non-bank financial institutions, to avoid a repeat of the kind of market turmoil that accompanied the crises at Lehman Brothers and American International Group.
"No institution anywhere in the financial system ought to be able to get so indebted that it threatens our financial stability," Frank said.
His committee is also planning to limit credit card issuers' ability to impose penalty interest rates.
"We will have a bill that will be coming out that will say they cannot raise your interest rate retroactively on any money you already owe them, that if you make a payment of money you owe that they cannot allocate it to that part of your debt that has the lowest interest rate," Frank said.
The subprime mortgage business -- loans to less-creditworthy borrowers -- went into a sharp downturn three years ago, setting off the current world financial crisis. While activity in that business has largely ground to a halt, Frank said he is pushing legislation to restrict it in the future out of a presumption the market will return someday.
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NAB leaves rates on hold
SYDNEY, April 7 (Reuters) - National Australia Bank (NAB.AX) will leave its standard variable mortgage rates unchanged after the central bank cut official rates, it said on Tuesday.
NAB said higher funding costs were behind the decision.
Earlier Commonwealth Bank of Australia (CBA.AX) said it would cut its rates by 0.1 percent. The central bank cut by 0.25 percent.
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NAB said higher funding costs were behind the decision.
Earlier Commonwealth Bank of Australia (CBA.AX) said it would cut its rates by 0.1 percent. The central bank cut by 0.25 percent.
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Sunday, April 5, 2009
Sellers could be sued under HIP rules
Telegraph - A revamped and strengthened version of the controversial packs is coming into force next week.
One of the features of the new HIP involves house sellers filling in a detailed questionnaire about their property. Lawyers fear that sellers will leave themselves open to be sued, as a result.
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The Property Information Questionnaire involves the seller answering about 30 questions about their home, such as: "Are you aware of any flooding at your property since you have owned it or before?" and "Is your property a listed building or contained in a listed building?"
The completed document will be included as part of the HIP and given to any buyer interested in putting in an offer.
The information questionnaire, which was not part of the original HIP, is designed to give the buyer as much information about the property as possible.
However, Simon Seaton, co-founder of Fridays, a property law firm, said: "By introducing this questionnaire a seller is giving representations which the buyer will reply upon in order to place an offer on the property.
"The concern is that if the information turns out to be incorrect, the seller could be sued by the buyer, in my opinion, for any out-of-pocket costs. This is an erosion of caveat emptor."
He said that in practice most buyers would be reluctant to sue, but if they were interested in buying the property they would use the incorrect information to bargain down the price. "This arms the buyer with ammunition to gazunder, which in the current property market is the last thing we need," he said.
The original HIPs were introduced two years ago by the Government in an effort to simplify the complexities of selling a house. The theory was that by forcing the seller, rather than the buyer, to compile key documents before the house hit the market, it would stop lengthy delays.
A pack, which costs a home seller £350 on average, contain a home's title deeds, local searches and an energy performance certificate – which rates the property's energy efficiency on an A to G scale.
The Department for Communities and Local Government said that Mr Seaton was scaremongering, and that sellers could fill in "don't know" to any of the questions.
However, Trevor Kent, the former president of the National Association of Estate Agents, said: "I really don't think this is scaremongering. We have been told as estate agents that if we help the vendor fill in the form we are liable under the Property Misdescriptions Act, which in it worst form could see me losing my job."
A Communities and Local Government spokesman said: “It is always been the case that a buyer could sue a seller for providing false information, and the questionnaire will make no difference to this.”
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One of the features of the new HIP involves house sellers filling in a detailed questionnaire about their property. Lawyers fear that sellers will leave themselves open to be sued, as a result.
Related Articles
House prices record their first rise in 16 months
HIPs will be 'unenforceable'
Four-beds become three in HIP fiasco
Home seller packs 'will lead to £250m waste'
Hips uncertainty slows house prices
Housing supply overtakes demand
The Property Information Questionnaire involves the seller answering about 30 questions about their home, such as: "Are you aware of any flooding at your property since you have owned it or before?" and "Is your property a listed building or contained in a listed building?"
The completed document will be included as part of the HIP and given to any buyer interested in putting in an offer.
The information questionnaire, which was not part of the original HIP, is designed to give the buyer as much information about the property as possible.
However, Simon Seaton, co-founder of Fridays, a property law firm, said: "By introducing this questionnaire a seller is giving representations which the buyer will reply upon in order to place an offer on the property.
"The concern is that if the information turns out to be incorrect, the seller could be sued by the buyer, in my opinion, for any out-of-pocket costs. This is an erosion of caveat emptor."
He said that in practice most buyers would be reluctant to sue, but if they were interested in buying the property they would use the incorrect information to bargain down the price. "This arms the buyer with ammunition to gazunder, which in the current property market is the last thing we need," he said.
The original HIPs were introduced two years ago by the Government in an effort to simplify the complexities of selling a house. The theory was that by forcing the seller, rather than the buyer, to compile key documents before the house hit the market, it would stop lengthy delays.
A pack, which costs a home seller £350 on average, contain a home's title deeds, local searches and an energy performance certificate – which rates the property's energy efficiency on an A to G scale.
The Department for Communities and Local Government said that Mr Seaton was scaremongering, and that sellers could fill in "don't know" to any of the questions.
However, Trevor Kent, the former president of the National Association of Estate Agents, said: "I really don't think this is scaremongering. We have been told as estate agents that if we help the vendor fill in the form we are liable under the Property Misdescriptions Act, which in it worst form could see me losing my job."
A Communities and Local Government spokesman said: “It is always been the case that a buyer could sue a seller for providing false information, and the questionnaire will make no difference to this.”
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House prices drop again
Telegraph - Prices fell at an annual rate of 17.5 per cent during the month, compared with record annual drops of 17.7 per cent in February – based on Halifax's preferred measure of comparing prices during the previous three months with the same period a year earlier.
The figures contrast with those reported by Nationwide on Thursday, which showed a surprise 0.9 per cent jump in house prices during March.
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House prices: What next?
House prices fall, leading to a record annual rate of decline, Halifax reveals
UK house prices rose in March for first time since 2007, Nationwide survey shows
Economists cautioned against reading too much into the Nationwide price rise, warning that while the market may have bottomed out, any recovery still remained a long way off.
Today's Halifax figures are more in line with expectations for the market at a time when the country is in recession and unemployment is rising.
But despite the steep monthly price fall, which followed a drop of 2.3 per cent in February, Halifax said there were "tentative signs that activity may be beginning to stabilise".
With the average property in the UK now costing £157,326, the house price to earnings ratio – a key measure of affordability – has fallen to 4.34, its lowest level since early 2003 and down from a peak of 5.84 in July 2007.
Recent steep interest rate cuts have also reduced the amount of income taken up by mortgage repayments from a peak of 26.9 per cent in October last year, to a three-and-a-half year low of 22.6 per cent last month.
Figures from the Bank of England released earlier this week showed the number of mortgages approved for house purchase jumped by 19 per cent during February, while a report out yesterday signalled that the banks and building societies thought they would increase mortgage lending during the coming three months.
Halifax added that house prices were around 2.7 per cent lower during the first quarter than they had been in the previous one, compared with falls of 5 per cent to 6 per cent recorded during each of the previous three quarters.
But despite the recent run of positive data on the property market, the group said it was too early to talk about a recovery.
Martin Ellis, Halifax housing economist, said: "Conditions in the housing market are likely to be tough during the remainder of 2009 despite the improvements in affordability.
"Increasing unemployment, low consumer confidence and the constraining effects of the continuing dislocation of the financial markets on the availability of mortgage finance are all likely to exert downward pressure on the market over the coming months."
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The figures contrast with those reported by Nationwide on Thursday, which showed a surprise 0.9 per cent jump in house prices during March.
Related Articles
House prices record their first rise in 16 months
Global markets boosted further by G20 promises
Builders buoyant as UK house prices show rise
House prices: What next?
House prices fall, leading to a record annual rate of decline, Halifax reveals
UK house prices rose in March for first time since 2007, Nationwide survey shows
Economists cautioned against reading too much into the Nationwide price rise, warning that while the market may have bottomed out, any recovery still remained a long way off.
Today's Halifax figures are more in line with expectations for the market at a time when the country is in recession and unemployment is rising.
But despite the steep monthly price fall, which followed a drop of 2.3 per cent in February, Halifax said there were "tentative signs that activity may be beginning to stabilise".
With the average property in the UK now costing £157,326, the house price to earnings ratio – a key measure of affordability – has fallen to 4.34, its lowest level since early 2003 and down from a peak of 5.84 in July 2007.
Recent steep interest rate cuts have also reduced the amount of income taken up by mortgage repayments from a peak of 26.9 per cent in October last year, to a three-and-a-half year low of 22.6 per cent last month.
Figures from the Bank of England released earlier this week showed the number of mortgages approved for house purchase jumped by 19 per cent during February, while a report out yesterday signalled that the banks and building societies thought they would increase mortgage lending during the coming three months.
Halifax added that house prices were around 2.7 per cent lower during the first quarter than they had been in the previous one, compared with falls of 5 per cent to 6 per cent recorded during each of the previous three quarters.
But despite the recent run of positive data on the property market, the group said it was too early to talk about a recovery.
Martin Ellis, Halifax housing economist, said: "Conditions in the housing market are likely to be tough during the remainder of 2009 despite the improvements in affordability.
"Increasing unemployment, low consumer confidence and the constraining effects of the continuing dislocation of the financial markets on the availability of mortgage finance are all likely to exert downward pressure on the market over the coming months."
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Wednesday, April 1, 2009
Mortgages top of Browns help plan
Telegraph - The Prime Minister insisted that there will be "targeted" plans for certain parts of the economy, including the mortgage market.
Despite growing resistance to new fiscal measures from the Treasury, the Bank of England and the CBI, Mr Brown is determined to not be put off announcing new spending plans in next month's Budget.
Mr Brown was challenged on his trip to South America that the consensus at home was that the country could no longer afford a new fiscal boost. On Tuesday, Mervyn King, the Governor of the Bank of England, said Britain could not afford further tax cuts or public spending rises in the Budget.
But Mr Brown, who returns to Britain tomorrow, claimed that he did not differ in his outlook from Mr King.
He said: "I think what Mervyn King was saying is what I have always said, that you have got to be cautious about everything that you do."
But he raised the possibility of specific, targeted measures including action on mortgages, or climate change and low carbon recovery, or public works and investment.
"We have got to get the economy moving, but of course you have got to have sustainable finances. That is what running an economy is all about."
He added: "We must not rule out the action that is necessary for jobs and growth."
One of the ideas that had been suggested to Treasury officials but then ruled out was a review of mortgages to see whether all mortgages in future should be trackers, rather than fixed rate.
A Treasury source said such a plan would be fraught with potential difficulties because of the volatility it could create.
But there is still a desire to try and revive the mortgage market and Alistair Darling, the Chancellor, will be expected to announce some initiative to get the banks lending to potential home owners and first time buyers in particular.
The number of homes changing hands has continued to be less than half of the levels seen a year ago. New figures yesterday showed that house prices fell in all areas of England and Wales on both a monthly and an annual basis during February.
The annual rate of house price falls has been steepest in the West Midlands at 17.7 per cent, closely followed by Wales at 17.6 per cent and the North West and South West, where properties have lost 17 per cent of their value during the year to the end of February.
Figures from the British Bankers' Association have shown that the number of mortgages approved for house purchase has risen for three months running.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "While latest mortgage approvals data suggest that housing market activity may have bottomed out and survey evidence indicates that buyer inquiries have picked up significantly recently as people are attracted by lower house prices and the Bank of England slashing interest rates, we remain sceptical that sales will pick up substantially any time soon and put a floor under prices."
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Despite growing resistance to new fiscal measures from the Treasury, the Bank of England and the CBI, Mr Brown is determined to not be put off announcing new spending plans in next month's Budget.
Mr Brown was challenged on his trip to South America that the consensus at home was that the country could no longer afford a new fiscal boost. On Tuesday, Mervyn King, the Governor of the Bank of England, said Britain could not afford further tax cuts or public spending rises in the Budget.
But Mr Brown, who returns to Britain tomorrow, claimed that he did not differ in his outlook from Mr King.
He said: "I think what Mervyn King was saying is what I have always said, that you have got to be cautious about everything that you do."
But he raised the possibility of specific, targeted measures including action on mortgages, or climate change and low carbon recovery, or public works and investment.
"We have got to get the economy moving, but of course you have got to have sustainable finances. That is what running an economy is all about."
He added: "We must not rule out the action that is necessary for jobs and growth."
One of the ideas that had been suggested to Treasury officials but then ruled out was a review of mortgages to see whether all mortgages in future should be trackers, rather than fixed rate.
A Treasury source said such a plan would be fraught with potential difficulties because of the volatility it could create.
But there is still a desire to try and revive the mortgage market and Alistair Darling, the Chancellor, will be expected to announce some initiative to get the banks lending to potential home owners and first time buyers in particular.
The number of homes changing hands has continued to be less than half of the levels seen a year ago. New figures yesterday showed that house prices fell in all areas of England and Wales on both a monthly and an annual basis during February.
The annual rate of house price falls has been steepest in the West Midlands at 17.7 per cent, closely followed by Wales at 17.6 per cent and the North West and South West, where properties have lost 17 per cent of their value during the year to the end of February.
Figures from the British Bankers' Association have shown that the number of mortgages approved for house purchase has risen for three months running.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "While latest mortgage approvals data suggest that housing market activity may have bottomed out and survey evidence indicates that buyer inquiries have picked up significantly recently as people are attracted by lower house prices and the Bank of England slashing interest rates, we remain sceptical that sales will pick up substantially any time soon and put a floor under prices."
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Mortgage approvals up by 19%
Telegraph - A total of 37,937 loans were approved for people buying a home during the month, the highest level since May last year, according to the Bank of England.
The figure suggests that record low interest rates and recent steep house price falls are tempting buyers back to the property market.
Reports from estate agents have suggested that interest in property has soared in recent weeks, but there had previously been little evidence to show that this was translating into sales.
The British Bankers' Association last week released figures showing that the number of mortgages approved for house purchase by the major banks rose for the third month in a row during February.
But it was thought that much of this increase was being driven by banks' greater market share, rather than higher overall lending levels.
However, today's Bank of England figures, which beat economists expectations and are well up on the recent six month average of 31,495, suggest sales may be picking up again.
Vicky Redwood, UK economist at Capital Economics, said: "February's household borrowing figures suggest that housing market activity may finally have turned a corner.
"The rise in the number of mortgage approvals for new house purchase... might suggest that the pickup in new buyer inquiries is feeding through into actual activity. With new buyer inquiries still rising, this is clearly quite promising."
But she added that approvals levels would need to broadly double before they were no longer consistent with falling house prices.
Despite the pickup, approvals for house purchase were still 44 per cent lower than in February 2008.
Remortgaging activity also continued to decline during the month, with just 32,633 loans approved for people switching to a better deal, well down on the previous six-month average of 52,780.
The fall in remortgaging activity is likely to reflect the fact that record low interest rates mean many people are better off staying on their lender's standard variable rate when their existing deal comes to an end, rather than taking out a new mortgage.Net mortgage lending, which strips out redemptions and repayments, also rose during February, increasing to £1.51 billion, up from £1.08 billion in January, but still below December's £1.96 billion.
The figures came as property intelligence group Hometrack reported a slowing in the rate of house price falls during March as activity in the market increased.
The group said house prices in England and Wales dropped by 0.6%, the lowest fall for 10 months, while both the number of potential buyers registering with agents and the number of sales agreed continued to rise.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The further limited rise in mortgage approvals from last November's record lows, and reports from estate agents that buyer inquiries have recently picked up appreciably, suggests that housing market activity has very likely bottomed out."
But he added that, with rising unemployment and the current problems in the economy, any recovery in activity was likely to be "gradual and fitful for some time to come".
Unsecured lending remained subdued during February, with borrowing through credit cards rising by £190 million, while consumers repaid £435 million more of loan debt and overdrafts than they borrowed.
Meanwhile, building societies continued to see their share of the mortgage market contract.
Net lending by the sector was negative for the second month running during February, with customers repaying £976 million more on their mortgages than building societies advanced through new lending.
But savings levels continued to soar, with mutuals taking in £1.6 billion, the highest amount ever during February and 18% up on the figure for February 2008.
The figure contrasts with one reported by the British Bankers' Association last week, which showed that consumers withdrew £73 million from banks during the same month.
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The figure suggests that record low interest rates and recent steep house price falls are tempting buyers back to the property market.
Reports from estate agents have suggested that interest in property has soared in recent weeks, but there had previously been little evidence to show that this was translating into sales.
The British Bankers' Association last week released figures showing that the number of mortgages approved for house purchase by the major banks rose for the third month in a row during February.
But it was thought that much of this increase was being driven by banks' greater market share, rather than higher overall lending levels.
However, today's Bank of England figures, which beat economists expectations and are well up on the recent six month average of 31,495, suggest sales may be picking up again.
Vicky Redwood, UK economist at Capital Economics, said: "February's household borrowing figures suggest that housing market activity may finally have turned a corner.
"The rise in the number of mortgage approvals for new house purchase... might suggest that the pickup in new buyer inquiries is feeding through into actual activity. With new buyer inquiries still rising, this is clearly quite promising."
But she added that approvals levels would need to broadly double before they were no longer consistent with falling house prices.
Despite the pickup, approvals for house purchase were still 44 per cent lower than in February 2008.
Remortgaging activity also continued to decline during the month, with just 32,633 loans approved for people switching to a better deal, well down on the previous six-month average of 52,780.
The fall in remortgaging activity is likely to reflect the fact that record low interest rates mean many people are better off staying on their lender's standard variable rate when their existing deal comes to an end, rather than taking out a new mortgage.Net mortgage lending, which strips out redemptions and repayments, also rose during February, increasing to £1.51 billion, up from £1.08 billion in January, but still below December's £1.96 billion.
The figures came as property intelligence group Hometrack reported a slowing in the rate of house price falls during March as activity in the market increased.
The group said house prices in England and Wales dropped by 0.6%, the lowest fall for 10 months, while both the number of potential buyers registering with agents and the number of sales agreed continued to rise.
Howard Archer, chief UK and European economist at IHS Global Insight, said: "The further limited rise in mortgage approvals from last November's record lows, and reports from estate agents that buyer inquiries have recently picked up appreciably, suggests that housing market activity has very likely bottomed out."
But he added that, with rising unemployment and the current problems in the economy, any recovery in activity was likely to be "gradual and fitful for some time to come".
Unsecured lending remained subdued during February, with borrowing through credit cards rising by £190 million, while consumers repaid £435 million more of loan debt and overdrafts than they borrowed.
Meanwhile, building societies continued to see their share of the mortgage market contract.
Net lending by the sector was negative for the second month running during February, with customers repaying £976 million more on their mortgages than building societies advanced through new lending.
But savings levels continued to soar, with mutuals taking in £1.6 billion, the highest amount ever during February and 18% up on the figure for February 2008.
The figure contrasts with one reported by the British Bankers' Association last week, which showed that consumers withdrew £73 million from banks during the same month.
Bye For NowIMS Foreign Exchange
Foreign Exchange Trading
Forex Trading Reports - Click for a free trial
Buying Euros? Buy Euros at the best euro Rates!
Buying Dollars? Buy US Dollars at the Best Dollar Rates!
Buying Australian Dollars? Buy Australian Dollars at the Best Australian Dollar Rates!
Contact IMS Foreign Exchange
+ 44 207 183 2790
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