Housing market up 5% on last year

More homes were sold in 2012 than expected as a result of greater mortgage availability.

Data from the Council for Mortgage Lenders has shown that there were 930,000 property transactions in 2012 which was 13 more than estimated and 5% up on 2011.

CML’s chief economist Bob Parnell said the result was partly due to the government’s Funding for Lending scheme. 

By late November the CML identified an increase in first time buyers across the UK which it they believed was partly due to the scheme which encourages banks to lend to mortgage borrowers.  London saw 10,000 first-time buyers taking out mortgages between July and September which was the highest number to buy a home in the capital in a  three month period since 2009.

The data has led the CML to predict growth in the housing market in 2013 as household incomes begin to stabilise.  However it also said that the positive effects of the FFL scheme would dissipate by early 2014 resulting in lower property transactions in that year.

Andy Cross @arcustax said “All areas of the market have benefited from lower mortgage rates this year and we’d expect this to continue in 2013.  However the question is how much growth will there be and is it sustainable?”

The CML’s optimism about future growth was tempered by it’s warning of threats could de-stabilise the market, in particular the potential break up of the Eurozone. 

House prices were also predicted to remain ‘broadly flat’ with economists such as Howard Archer at HIS Global Insight predicting that significant and sustainable house price rises were still a long way off.

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