Housing market active again

Housing market active again

Housing market active again

Residential valuations in March this year were 7% higher than the same period last year, according to Connells Survey and Valuations. They reported that this was the fourth month in a row with an increase in valuations over the same period a year ago.

Q1 2011 had 16% more valuations than Q1 2010, and we saw an increase in the number of first time buyers (FTB's) getting valuations, in February there was an increase of 21% and in March it was up 34% year on year, indicating an increase in FTB's entering the housing market.

Business development director at Connells Survey and Valuation, Colin Dorman, commented:

"The real barometer of the health of the housing market is activity and this is showing signs of picking up - with a welcome boost in first-time buyer demand."

"The government's new FirstBuy scheme should provide added relief for a limited number, but the real lifeblood of first-time buyer market is mortgage finance, and we still need lenders to do more to fan the flames of recovery."

This could be an early indication of growth in the contractor mortgage market. Demand has not wavered as first time buyers still wanted a home, it was the supply of credit that was holding back the market. Credit has come back slowly, but this was to ensure we did not repeat the mistakes that lead to economic collapse in 2008.

In other news, all product and arrangement fees have been removed from two, three, and five year fixed rate mortgage deals from ING Direct. Their deals were already competitive so this will create fierce competition in the mortgage market place.

Mortgage director of ING Direct, Julian Hartley, stated:

"We have been seeing increased speculation about Bank of England Base rate increases and this is already feeding through into more enquiries about fixed rate products."

"Our economists are advising us that when rates do rise, they may do so more steeply than many pundits are predicting. It is interesting to note that historically when rates do start to increase it is at a faster pace than expected."

"We are looking to expand our mortgage business and it makes sense to increase the appeal of our fixed rate products at a time we predict they are going to be more in demand."

As a company ING direct are not normally contractor friendly, but these competitive forces have a tendency to filter down into contractor mortgage products.

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