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House Prices May Dip Again

House Prices May Dip

The housing market may take another dip as potential buyers struggle to get mortgages according to Bank of England policy maker Kate Barker.

The global credit crisis saw house prices in the UK drop by 20% at the lowest point as banks wary of risking new lending withdrew from the market and confidence was dented.

The market has however come back strongly since hitting bottom.

Barker, who has penned reviews of Britain’s housing supply and planning for the government and helps to set the interest rate said she had been surprised by the rebound.

“It seems more likely than not to me that mortgage finance is clearly not going to be available going forward on the terms it used to be,” Barker told MPs. (more…)

Mortgage Approvals Jump

Mortgage Approval

According to Reuters, Banks have approved 81.4% more home loans in August than they did in August 2008 a survey showed on Wednesday a rise towards pre-credit crunch levels.

The British Bankers’ Association stated 38,095 mortgage applications were approved in August. That was slightly lower than the 38,186 approved in July but a significant rise on August 2008 when activity in the housing market almost stopped completely.

Other surveys indicate that record low interest rates have helped to stabilise Britain’s housing market after sharp drops in value last year.

Loan applications for house purchases have recovered to early 2008 levels, but low levels of consumer demand and a low number of properties coming onto the market will continue to impact on lending.

Analysts stated that the figures provided evidence of a recovery in confidence, despite the the annual rise in approvals being flattered by a particularly weak month last year.

House prices in the UK fell by a fifth during 2008 but appear to be picking up in recent months. A Reuters survey earlier this month indicated that most analysts think property prices have bottomed out but predict growth will be slow as supply gradually increases.