United Kingdom – 24 July 2015 – Last month, the housing market of United Kingdom began to see a steep rise in the profit graph. Along with the increasing number of approvals for mortgages which has even scaled up a fifteen month high period. In fact, it is reported that the said market is “beginning to hot up again” as per the information given by the “British Banker’s Association”.
The increment of the mortgage numbers, whereby leading to more of “house purchases” raised the quantity to “44,488”. Statistics show that this year’s purchase rates of houses have gone up by eight percent as compared to last years’ purchase rates at around the same time of the year. Moreover, to quote the digitaloutlook:
The increment of the mortgage numbers, whereby leading to more of “house purchases” raised the quantity to “44,488”. Statistics show that this year’s purchase rates of houses have gone up by eight percent as compared to last years’ purchase rates at around the same time of the year. Moreover, to quote the digitaloutlook:
“It marked 5,000 more approvals than the average seen over the previous six months.”
In fact, it was observed that along the increasing mortgage rates, the remortgaging numbers “also jumped”. The leap of remortgaging rates was by twenty percent higher. The British Banker’s Association’s “chief economist”, Mr. Richard Woolhouse, attributes this sudden jump to the competitive deals, whereby he believes that the increment –
“...could be down to savvy borrowers taking advantage of competitive deals on fixed rate mortgages ahead of a possible rise in interest rates”.
The statistic figures took into account the fall of market activities that had taken a dip sometimes around last year, which came as the consequence of the “changes in mortgage rules”. However, finally, the “figures were adjusted accordingly”, whereby it is also thought that the present market pick-up could also be a result of “record-low mortgage deals” which prevailed the market for last two years. The records show that since the previous two years the “fixed” mortgage rate had come crumbling down. Therefore, from the peak of “3.67%” within a year’s time it fell to “2.75%”.
According to the predictions of some of the economists, the “housing market” will arrive at a cooler temperature once it reaches the “prospects of higher interest rates”. Interests are likely to augment by the year end indicates Mark Carney, the governor of “Bank of England”. Furthermore, the United Kingdom’s and European chief economist of “IHS Global Insight”, Mr. Howard Archer said:
“While we currently expect the Bank of England to first hike interest rates in February 2016, there is now a very real prospect that they could act before the end of 2015”.
Archer even assured that even the increment in rate takes place; it is going to be a gradual process as per the notice of Carney. There are expectations in the IHS that there will be a rise in the house prices by 6% in this year which will even climb up by further 5% in the following year. This pattern of pricing will be supported by low interest rates in mortgage, growing strength of earnings, and higher opportunity of employment which culminates in “elevated consumer confidence”. Thus, Archer adds:
“Nevertheless, the upside for housing market activity and prices is expected to be constrained by more stretched house prices to earnings ratios, tighter checking of prospective mortgage borrowers by lenders and the strong likelihood that interest rates will soon start rising gradually”.