Andrew Frankish, managing director of leading independent mortgage broker Mortgage Talk, has hit back at commentators who predicted gloomy times ahead for UK home owners.
‘Commentators who forecasted a housing market crash during 2005 are being needlessly pessimistic,’ states Frankish. ‘Our own figures showed a strong start to the new year, with further improvements in the trend for February. These statistics build on survey results from Nationwide that reveal seasonally adjusted house price rises of 0.5 per cent for last month, translating to a year-on-year rise of 10.2 per cent.’
Frankish sees this as a sign that a ‘reasonable balance’ has returned to a people’s expectations, following three to four years of extremely aggressive growth in the housing market. This also represents a turning away from the boom-and-bust cycle of the past few decades, he says.
‘It was clear that the rises we have experienced over the last few years could not be sustained, and had become self-destructive by precluding first-time buyers from the market,’ adds Frankish.
‘Our view at Mortgage Talk is that mortgage applications during the latter part of 2004 declined at least in part because of the industry’s inability to cope with the onset of the new FSA rules governing the selling of financial services. Out own preliminary statistics show that, even though January was a good month for us, February has proved to be even better.
‘Every indication is that there are still plenty of consumers looking to buy and sell property. Overall, it seems that the Bank of England has done well in manipulating interest rates to manage supply and demand in the housing market, with the indication that those predicting a crash will be proved wrong.’
Saving is back in fashion
Britons are back in the mood for saving, according to new research by Skipton Building Society.
Skipton has revealed with it believes to be a radical shift in attitudes towards finances, with nearly one in two (46 per cent) saving an average of £146 per month – which translates to £2 billion across the UK. Debt could become a thing of the past, finds the building society, as more than a third of people (39 per cent) putting by more money than they did three years ago.
Incentives for saving more include the prospect of working less; 16 per cent of those surveyed are saving for an early retirement, while 13 per cent have put money aside for more time off work, via sabbaticals and other breaks.
Skipton spokesperson Jennifer Holloway says the spend-spend-spend culture has had its day. ‘It’s good to see that thrift is back in fashion. Although the general rule is to aim to save ten per cent of your take-home pay, the main message is that every penny helps, so start saving today.’