House Prices Level Out but Interest Rates Continue to Decline
House prices are “on a plateau” according to the Council of Mortgage Lenders (CML). This is despite the fact that current mortgage deals on the market have some of the lowest rates seen in years. According to the data from CML, mortgage lending valued at £17.8 billion for September. This is 1% lower than the previous month and 10% higher than the previous year.
This should add further confirmation to those experts that have dismissed concerns of a UK housing market bubble. Even the housing market in London is slowing down.
In the third quarter for the year, gross mortgage lending reached £55.5 billion, which was up 8% from the second quarter and was an increase of 13% over the third quarter of 2013.
Bob Pannell, CML Chief Economist, remarked, “Recent indicators and policy actions corroborate our view of a gentle easing in market conditions. There is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau.”
While mortgage lending has slowed, remortgage demand has failed to reach the level expected with the warnings of an impending interest rate increase by the Bank of England. The Monetary Policy Committee (MPC) is already having votes for increases by some of its members. Once the minutes are released for this month’s meeting the tone will be better known as to how close the committee was to raising the standard base interest rate from the current 0.5%.
Meanwhile, lenders are competing for the attention of borrowers and are introducing even lower interest rate deals due to low demand.
For those considering a remortgage or mortgage for property purchase, rates can be found that are attractive. This trend is not due to remain for long, so shopping around and making a choice soon is suggested by experts.