223: Property investment market in 'excellent health'

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The UK property investment market is in "excellent health" new mortgage figures from the Bank of England reveal.

Official data released today shows 126,000 mortgages were approved for house purchases in September, a two-and-a-half year high.

"Today's figures show the housing market remains in excellent health, with a strong economy, and property investor activity fuelling strong demand for housing," said David Stubbs, senior economist at the Royal Institution of Chartered Surveyors (Rics).

Figures from the Bank of England show total net lending on homes increased �8.9 billion in September, some 11.2 per cent higher than last year.

But while the number of mortgages continues to rise, the supply of properties coming onto the market has not risen in line.

"Mortgage approvals may be up, but new property coming on to the market is the lowest in four years reducing supply," said Mr Stubbs.

"Market conditions look set to tighten going forward causing further price rises."

But price rises are not good news for everyone.

Howard Archer, chief UK economist at the Global Insight consultancy, commented: "Higher interest rates and recent buoyant house prices will add to affordability problems and seem likely to increasingly squeeze buyers out of the market.

"Significantly, first-time buyers are finding it ever more difficult to break into the housing market, while a growing number of people have missed mortgage payments recently.

"There are also increasing reports that people are finding it more difficult to trade up the housing ladder.

"Ultimately, we believe affordability constraints will cause house prices to moderate, although it looks like taking longer than we previously thought."

Source:

MyFinances.co.uk