RICS chief economist expresses cautious optimism

Tuesday, 24 November 2009 11:39

Commenting on the BBA mortgage approval figures Simon Rubinsohn, RICS chief economist, said: ‘Data released this morning by the British Bankers' Association shows the level of mortgage lending continuing to edge higher, albeit in a very gradual way.

This is broadly consistent with the conclusions of the Bank of England in its recently released Trends in Lending publication. Meanwhile, banks clearly remain a little more cautious about lending to other parts of the property industry with finance to both the commercial real estate sector and the construction industry continuing to be being scaled back.

‘Although the availability of finance for homebuyers has increased a little in recent months with some evidence of a modest relaxation in the strict control on loan to value ratios for first-time buyers, access to the property market still remains challenging particularly given the rebound in residential prices in recent months. That said, the lack of supply of property coming onto the market is proving to be an increasingly important obstacle to a more meaningful pick-up in transaction levels. Inevitably, the number of new instructions will remain fairly subdued into the year end but it is crucial that more fresh stock is placed with agents in the early part of 2010 to give the market a further boost. More importantly, this is critical to preventing a further sharp upward move in house prices.’