A stirring mortgage market

It is a subject which splits opinion on a daily, weekly and monthly basis – the housing market. The sector is pored over in minute detail, with many lenders, bodies and other organisations publishing figures at the end of each month, detailing average house prices, annual changes, monthly changes, regional breakdowns, discrepancies between asking and selling prices, and so on.

Data released recently by the Royal Institution of Chartered Surveyors (RICS) says that house prices are showing their most pronounced rise for more than two years. This, in part, has been caused by a lack of supply, but should not take away from the fact that the proportion of surveyors reporting price increases is at its highest point since May 2007 – well before the outset of the credit crisis.

It is difficult to ascertain just how accurate or reliable these surveys – and there are a great many – actually are. Most are released by groups or organisations that have a vested interest in the value of property going up. One of the more reliable reports comes from the Land Registry, which bases its figures on the prices houses are actually sold for, not what they are deemed to be worth by the owners or agents. After all, a house is only worth what somebody is willing to pay for it.

That being said, there does seem to be evidence that an appetite for entering the housing market is returning. Reporting its figures for September, the National Association of Estate Agents said that the average number of house hunters registered at its agents had jumped from 238 to 294 in the month. Furthermore, a survey has found that it is cheaper to buy a home in the UK than it is to rent in all regions apart from London, although this assumes that first time buyers have sizeable deposits in place.

What is certain is that at the end of September, there were more mortgage products to choose from than there have been for almost a year, with a shade over 1,400 on the market. There are still just a handful of products that offer buyers a loan worth the total value of the property, or even 95 per cent, but the 90 per cent loan-to-value market is now comprised of more than 100 products, which has not been the case for most of 2009.

A number of new trackers have also been launched by providers and, with some predicting that the base rate of interest will remain low for some years to come, the more daring of potential homeowners have a number of competitive deals to choose from.

There is still some way to go before the housing market can be considered in good health, but a number of providers have decreased their rates lately as well as launching new products that look competitive. Those who had given up designs on owning their own homes could do worse than giving the mortgage best buys a cursory glance once more.