Home Loan Advances Higher or Lower during Last Month?

Some slightly conflicting signals emerge from the mortgage lending figures this week casting doubt on the trend in house prices and the prospect of owners achieving quick sales on their houses. On the one hand the number of mortgages granted improved again to 45,000, but the actual amount lent showed a small decrease.

The explanation would appear to be that the down payment required by lenders, many requiring 25%, together with the recent decreases in house prices has caused a reduction in volume even with an increase in transaction numbers. If this is the case then the recent optimism about the bottoming out of house values does seem justified.

One other explanation could be what might be called the “bargain buyer” effect. Once there is a general acceptance that property values have reached the lowest values, buyers are encouraged back into the market to pick up what they consider to be bargains. Some of these may be investors or cash buyers who do not require a mortgage. In other words there may be a considerable number of property sales which simply are not included in the mortgage approvals figures. These buyers will of course try to home in on those wanting or needing to Sell Home Fast.

Those seeking the bargains will naturally seek out the best priced property in certain areas, looking more for value than appeal. They will also barter with sellers to secure the best possible deal. The effect of this is that a lot of the cheapest houses will be unavailable potentially in a very short space of time and buyers coming along in a few months time may be faced with a shortage of very cheap properties. That would be the time I’d try to pick if I wanted to Sell my Property fast.

The likely effect is that in a few months time the mass of available properties comprises more of the stubborn sellers, those who decided not to reduce selling prices to allow a sale but who rather stuck to their price and decided to wait out the market difficulties.

This may become clear in a short term upward spike in property prices followed by the ideal gradual increase in line with inflation.

In any event the figures do now seem to point clearly in the direction of a stabilised housing market. The feeling is that those looking for a bargain will now have to get in quickly and complete a Quick Property Sale before a price recovery starts in earnest. Sellers will also begin to be confident about their chances of achieving good asking prices and will be more inclined to turn away very low offers.

As with any market, prices are established by supply and demand. As these levels settle there can now be said to be clear indications that the price falls have peaked and that the market has at least stabilised.