Hometrack Data Predicts Repeat of 2010
Hometrack data seems to be predicting a repeat of 2010. Prices on houses are expected to decline more, by at least another 2%. The standard base rate is expected to remain at 0.5% just as it sat throughout 2010. The number of approved mortgages for 2011 are to level at 1.2 million mortgages which is unchanged from last year.
Much of the reasoning behind a steady drive without much growth through this year, is due to unknowns in the economy. It is still just the beginning of recovery and it is unknown how it will fare due to new VAT increases, rising inflation, the effect on inflation from public spending cuts, and what comes from the Financial Services Authority’s Mortgage Market Review’s changes to lending. David Catt, Hometrack Chief Operating Officer, said: "The pressure on banks will be immense. Until consumer sentiment, money markets and the global economy have recovered their equilibrium and there’s clarification on regulatory policy, lending levels will remain subdued." Remortgages are expected to be in demand for 2011 balancing out the decline in home purchase mortgages due to constricted lending. Hometrack expects 355,000 remortgages by the end of the year. Many homeowners have been choosing remortgage thanks to the competitive offers currently found from lenders. There are also many who seek to secure the lower rate now available rather than wait till it raises and miss out.