Commenting on lending so far for 2003, the CML said: “It was a strong start to the year for lenders, with gross lending totalling £19.4 billion in January. And on a seasonally adjusted basis gross lending exceeded the levels reached in 2002. Net lending also remained strong at £7.3 billion, but not quite matching the peak of last year. Although non-seasonally adjusted approvals have dipped over the last couple of months, on a seasonally adjusted basis there has only been a slight moderation.”
Nationwide reported a 26.5% increase in house prices in January, up from 25% in December. In contrast the Halifax reported house price growth of 22.5% in January, down slightly on December’s growth rate. The CML believes it is clear that the housing market currently remains strong yet states there may however, be tentative signs of a slowdown. For example, the latest RICS survey showed the net balance of surveyors reporting a rise in house prices had fallen significantly. The survey reported that prices were falling in London and the South East and stagnating in the South West and would appear to signal a rippling out of the slowdown. Data from the Land Registry would also support a cooling off in London, but with the Midlands and the North still seeing very strong house price growth.
And now for the bad news. The CML believes that whilst, the decision to cut rates is likely to have been triggered in part by a desire to sustain confidence in the broader economy at a time of political uncertainty, “it is unlikely to herald a further round of aggressive interest rates cuts”.
