'Modest recovery' as mortgage loans go up

The Council of Mortgage Lenders (CML) said 35,000 home loans were advanced over the month, after one-off factors such as the winter weather and the end of the stamp duty holiday in December hit lending in January.

The total number of loans was up 49 per cent on a year earlier while the value of mortgages was 5bn – 9 per cent up on January and 67 per cent ahead of 12 months earlier.

While the CML said the figures signified a "modest recovery" in lending, it added that the weather and the end of the stamp duty holiday – which had lifted the tax threshold to 175,000 for a year – meant that trends were difficult to identify.

But the Government gave a boost for first-time buyers in March's Budget with a duty exemption on purchases up to 250,000 – financed by a hike from 4 per cent to 5 per cent on properties above 1m.

CML head of research Bob Pannell said: "With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future, although the new stamp duty exemption for first-time buyers could boost the market somewhat."

Andrew Montlake, from independent mortgage brokers Coreco, added: "At the moment, it's difficult to predict how the housing market is going to react from one month to the next, because there are so many factors influencing market conditions.

"Once the General Election and World Cup are out the way, the picture will be much clearer."

n Homeowners rushing to put properties on the market before the General Election sent selling activity to its highest since May 2007 last month.

But the latest housing market survey from the Royal Institution of Chartered Surveyors (RICS) suggested that price rises eased in March.

RICS said 9 per cent more chartered surveyors reported a rise than a fall in property prices last month, down from 18 per cent in February.

Respondents said that while London, the South East and Scotland

performed well, prices fell across East Anglia, Yorkshire and Humberside, the north and West Midlands.

And a fall in the sales-to-stock ratio – a key indicator of future house price inflation – suggested further stabilisation of prices throughout the remainder of 2010.

Seller activity rose to levels not seen since just before the

introduction of Home Information Packs (HIPs) in 2007.

A net balance of 21 per cent of surveyors saw a rise in new

instructions, compared with a balance of 16 per cent in February.