UK Housing Market Shows Signs of Recovery

on Oct 23, 2012
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The UK housing market may be starting to pick up, The Times reported on October 22, quoting data by Lloyds TSB. The figures indicated that the number of property sales increased in two-thirds of towns across England and Wales, with Felixstowe the country’s top home sales hotspot.

**House Sales in England and Wales Increase**
The Lloyds TSB research, which looked at Land Registry figures for housing transactions in the 500 largest postal towns and London boroughs, showed that the number of house sales both in England and Wales went up by 2.2 percent in the first half of 2012, from 275,953 in first six months of 2011 to 282,086. In addition, the number of towns which saw a rise in home sales more than doubled over the past year, reaching 65 percent.

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“It is encouraging that the number of towns across England and Wales seeing a rise in home sales has increased significantly over the past year,” noted Suren Thiru, housing economist at Lloyds TSB in a company press release.
The Suffolk seaside town of Felixstowe was the house sales champion, with a 60 percent increase in the first half of 2012. The runner-up was Brighouse in West Yorkshire with a 53 percent increase.

**Worsening North-South Divide**
!m[Sales Rise In 500 Towns In England And Wales](/uploads/story/630/thumbs/pic1_inline.png)The research, however, pointed to a worsening north-south divide, with 60 percent of the towns with a rise in house sales located in southern England. Salford and Leigh, both in Lancashire, saw the biggest fall in the number of property sales, with Salford reporting a 28 percent decline, followed by Leigh with 27 percent.

The Times reports that the observed regional differences may be explained with the gap between house prices and earnings. Prices in the ten towns with the biggest sales increases stand at an average 5.8 times local gross annual earnings, relative to an average of 7.1 times income in the ten towns where the largest falls were recorded.

“This highlights the very mixed state of the housing market at a local level compared with the rather subdued picture at a national level,” pointed out Mr Thiru, as quoted by The Times. “Many of the top performing towns are in areas where improved levels of affordability over recent years have helped support demand for those able to enter the housing market.”

**Mortgage Lending Data Reveal Sluggish Activity**
Meanwhile, mortgage approval statistics of the British Bankers’ Association (BBA) indicated that activity in the UK housing market remained sluggish. On October 23, The Telegraph reported that mortgage lending in September totalled £7.3 billion, down six percent from September 2011. Numbers of remortgaging approvals were 15 percent lower, whereas approvals for other secured lending were down by 23 percent.
And while mortgage approvals in September were higher than they were in August, The Telegraph quotes Matthew Pointon, property economist at Capital Economics, as saying that viewing this “further slight uptick in mortgage approvals” as the beginning of a sustained recovery in the housing market would be premature. “The improvement was modest, and banks show no desire to materially increase their mortgage lending,” added Mr Pointon.

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