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Published 26 January
2011 - Source: RICS
 Simon Rubinsohn, RICS
Chief Economist, provides comment on the December BBA lending data
and MPC minutes.
"Data from the BBA shows
residential mortgage approvals slipped back to their lowest point
since January 2009. The decline in activity is also reflected in the
negative trend in the RICS new buyer enquiries series from the
monthly RICS Housing Market Survey.
"A key reason for the
fall in interest from prospective purchasers is still the lack of
available mortgage finance for first-time buyers. That factor is,
however, being compounded by increasing concern about the economic
outlook. Yesterday’s disappointing GDP figure will do nothing to
ease this worry.
"Meanwhile, the minutes
of the December MPC meeting demonstrate the dilemma facing the
authorities as inflation approaches the four per cent mark, with the
split between the economics hawks and doves becoming more pronounced.
"A rate hike over the
coming months would clearly be bad news for the housing market but
even without an officially sanctioned move, actual mortgage costs are
already beginning to creep up reflecting developments in financial
markets. Against this backdrop, housing transactions are likely to
remain weak over the coming months."
Simon Rubinsohn, RICS
Chief Economist
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