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| China's economic crisis will not hit UK housing market, say experts | |
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| China’s economic woes will set back interest rate rises in the UK by two to three months but this will not have any significant impact on the housing market, claimed a leading economist. | China’s economic woes will set back interest rate rises in the UK by two to three months but this will not have any significant impact on the housing market, claimed a leading economist. |
| Richard Woolhouse, chief economist at the British Bankers’ Association made the comments following fresh data from the BBA that showed that the number of people remortgaging to cheaper deals in July was at its highest level for four years. | Richard Woolhouse, chief economist at the British Bankers’ Association made the comments following fresh data from the BBA that showed that the number of people remortgaging to cheaper deals in July was at its highest level for four years. |
| “In July people were concerned about an interest rate rise and I think this led to a rush in remortgaging,” he said. | “In July people were concerned about an interest rate rise and I think this led to a rush in remortgaging,” he said. |
| “Everything that has happened in China this week puts the likelihood of that rise back two to three months. But even if rates do go up in the near future I don’t think mortgage rates will go up as much and in any case this won’t impact much on people’s decision to buy a house.” | “Everything that has happened in China this week puts the likelihood of that rise back two to three months. But even if rates do go up in the near future I don’t think mortgage rates will go up as much and in any case this won’t impact much on people’s decision to buy a house.” |
| He said that people will still do “whatever they can” to get on the housing market in the face of continuing house price rises. Rate rises, even if they are delayed, will be small and gradual – rising to 3% over the next five years, he predicted. | He said that people will still do “whatever they can” to get on the housing market in the face of continuing house price rises. Rate rises, even if they are delayed, will be small and gradual – rising to 3% over the next five years, he predicted. |
| “Even if rates go up faster than expected I don’t think that would affect the housing market. The fact is that price rises are being driven by a shortage of housing and demand outstripping supply.” | “Even if rates go up faster than expected I don’t think that would affect the housing market. The fact is that price rises are being driven by a shortage of housing and demand outstripping supply.” |
| The BBA figures show that overall the number of mortgage approvals in July were 15% higher than a year ago, with house purchases rising 11% and remortgaging nearly 29% up – to its highest level for four years. This was as a result of borrowers continuing to lock in to what are now the lowest price fixed rates ever in order to maintain control of their mortgage costs, said the BBA. | The BBA figures show that overall the number of mortgage approvals in July were 15% higher than a year ago, with house purchases rising 11% and remortgaging nearly 29% up – to its highest level for four years. This was as a result of borrowers continuing to lock in to what are now the lowest price fixed rates ever in order to maintain control of their mortgage costs, said the BBA. |
| Richard Sexton, director of e.surv chartered surveyors said that a fear of rising interest rates had been helping to drive levels of remortgaging but suggested that an anticipated delay in that rate rise would not change things significantly. | Richard Sexton, director of e.surv chartered surveyors said that a fear of rising interest rates had been helping to drive levels of remortgaging but suggested that an anticipated delay in that rate rise would not change things significantly. |
| “A fear of rising interest rates isn’t the only factor that can push remortgaging levels upwards,” he said. “A positive combination of wage growth, low inflation and healthy house price growth is contributing to a mix of economic good news which is supporting the remortgage sector. Many homeowners now have a much stronger financial footing.” | “A fear of rising interest rates isn’t the only factor that can push remortgaging levels upwards,” he said. “A positive combination of wage growth, low inflation and healthy house price growth is contributing to a mix of economic good news which is supporting the remortgage sector. Many homeowners now have a much stronger financial footing.” |
| The figures from Britain’s high street banks tallied with those of the Council of Mortgage Lenders, which were released last week. | The figures from Britain’s high street banks tallied with those of the Council of Mortgage Lenders, which were released last week. |
| The CML said that the value of mortgages handed out to first-time buyers and people moving house hit its highest monthly total for seven years in July. | The CML said that the value of mortgages handed out to first-time buyers and people moving house hit its highest monthly total for seven years in July. |
| Lending stood at an estimated £22bn for the month, an increase of 9% compared with June, and up 14% on the same month last year. | Lending stood at an estimated £22bn for the month, an increase of 9% compared with June, and up 14% on the same month last year. |
| The CML said mortgage lending remains on track to hit £209bn for the calendar year, which would mean an increase of 3% on 2014 and represent the highest annual lending since 2008. | The CML said mortgage lending remains on track to hit £209bn for the calendar year, which would mean an increase of 3% on 2014 and represent the highest annual lending since 2008. |