Mon 07 Feb 2022
The Bank of England has revealed that mortgage lending is returning to more ‘normal' levels. Jeremy Leaf, principal of Jeremy Leaf & Co, told The Evening Standard: ’These figures show that the housing market is moving into more ’normal territory’ as mortgage approvals return close to their pre-Covid averages.' He added in City AM: ‘Certainly we are finding in our offices much the same pattern as buyers and sellers shrug off the loss of the stamp duty holiday and get down to business in the new year, especially as supply and demand are beginning to match up more closely.'
Meanwhile, house prices saw their biggest annual rise since the financial crisis last year, according to the Halifax. Jeremy Leaf told This is Money: 'Stretched affordability means that prices are unlikely to rise as quickly as they did for a large part of 2021 but family houses in particular will continue to do well.’ He explained further in The Guardian: ‘Buyers are clearly still emerging following their short hibernation to carry on where they left off, quickly snapping up new properties which come onto the market. Most are choosing to forget worries about rising inflation, interest rates and taxes to say nothing of Omicron. However, lack of stock is reducing the number of transactions and supporting prices. Market appraisals and new instructions are improving but not quickly enough yet.’
While prices rose, the number of house sales in December was down by a fifth compared with a year earlier, but bounced upwards from the previous month, according to HM Revenue and Customs. Jeremy Leaf told The Independent: ’These numbers interestingly demonstrate market strength and resilience, even in the build-up to Christmas and withdrawal of Government economic support in September. Transactions are always a better measure of property market health than more volatile house prices. However, we have moved on since December. Activity and price rises are slowing a little, not least because of the continuing shortage of stock but concerns about rising inflation and mortgage rates is also compromising confidence when it comes to taking on debt.'
It is no surprise that it has become virtually impossible to find a family home to buy in London on an average salary, according to new research from the Office for National Statistics. Jeremy Leaf told Mail Online: ’Last year, average property prices outstripped average earnings and stayed there, which made it even more difficult to buy houses or flats with outside space and these were top of the wish list for those looking to move. For first-time buyers, it was even more difficult to take that initial step onto the ladder without help from the Bank of Mum and Dad. The net result is evidenced in the Zoopla figures showing virtually no houses available in many parts of London, following multiple offers on anything reasonably decent at a fair price.'
The pandemic property boom has been driven by a surge in demand for larger homes, according to research from the Halifax. Jeremy Leaf told Mail Online: ’Soaring demand for detached homes is not surprising as we are seeing buyers prepared to stretch themselves to purchase properties which they regard as for the longer term, rather than settling for smaller houses or flats. These buyers are often using money saved during lockdown by not going on holiday or other spending, to contribute toward their deposit. They are also taking advantage of continuing low interest rates even though the threat of higher repayments and inflation is looming.’