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News that Alex Salmond, the leader of the ruling SNP in Scotland, has been somewhat liberal with his recent comments about housing budgets and assistance has caught the attention of opposition...
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Wednesday 23rd July 2008
News that mortgage approvals for June were over 66% down on the same period last year have spooked many in the mortgage sector where hopes were growing of a possible ‘bottoming out’ of the market. The news from the British Bankers Association (BBA) comes just hours after mortgage specialist Paragon announced bid talks, and days after Minerva agreed in principle to a takeover. Is this the bottom of the market?
As we have pointed out on this site on many occasions it is near impossible to forecast the bottom of any market, never mind in the current unique economic climate. Much of the problem is down to a loss of confidence in the UK economy and the housing market, with buyers affectively going on strike and sellers willing to accept crazy offers.
Surprisingly, while the number of mortgage approvals dropped, total lending in June actually rose by £3.8 billion, although this rise of 12% over June 2007 is the weakest since October 2007. As more and more mortgage companies continue to struggle there is a feeling that much of the competition for which the UK sector is renowned will actually be reduced over the next few months.
We may arrive at a situation where the major banks will be calling the shots as the economy moves out of recession, and have the market pretty much to themselves, something which does not bode well for the consumer. |
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