May 8, 2009
Experts In Disagreement
Conflicting official data about the housing market is continuing to confuse the picture. So where do we start?
According to Nationwide, house prices fell slightly in April – by 0.4%. The lender said that the annual fall is 15% and the average house price now stands at nearly £151,000.
Looking more closely at the small print, Nationwide had previously reported a small rise in March. However, the Land Registry says house prices fell 0.4% in March, amounting to an annual drop of just over 16%.
The Land Registry also reported on just 24,770 transactions in January. Data for transactions in February and March is still incomplete, and the Land Registry has yet to report on these.
However, according to the Bank of England, mortgage approvals rose by 4% month on month in March, with 39,230 loans approved for house purchases, compared with 37,716 in February.
The value of approvals for house purchases in March also went up slightly, from £4.4bn in February to £4.6bn, says the Bank.
The increases build on the rise in the Bank of England’s February figures, which were themselves up 18% on January, and ahead of the six-month average of 32,473 mortgage approvals.
However, mortgage approvals do not all translate into actual transactions, which may explain the gap between mortgage approvals noted by the Bank of England and sales reported by the Land Registry.
But what is really confusing is the news that mortgage lending by banks in March was down on February. This is according to the British Bankers’ Association, and is a stark contrast to the Bank of England’s far sunnier data.
Approvals fell to 26,097 in March, says the British Bankers’ Association – 13,000 fewer than the Bank of England is reporting.
Furthermore, the BBA says that this number is a fall from 28,024 mortgage approvals in February, and 25.3% lower than in March 2008.
By value, the BBA also disagrees with the Bank of England to the tune of a couple of billion or so, saying that approvals for house purchase fell from £3.5bn in February to £3.3bn, and total mortgage approvals from £7.7bn to £7.3bn.
The BBA also says that gross mortgage lending by banks was £8.9bn – the lowest since April 2001.
The Bank of England’s figures, however, suggest the best mortgage figures since May 2008.
Confusion? We’ll say. Chaos? Probably.
But landlords adding to their portfolios at the bottom of the market tend to take advantage of exactly that, since the only thing that is clear is that no one knows what house prices or transaction levels are doing.
Verdict: Buy, hold, and don’t sell.
Source: rla
