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Row over housing 'recovery' row

Nic Cicutti
Thursday 19 October 1995 23:02 BST
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NIC CICUTTI

A row broke out between mortgage lenders and housing analysts yesterday over whether the housing market remained flat or was beginning to recover. Analysts disputed claims by mortgage lenders that new September lending figures showed the market was still in crisis.

The Building Societies Association said net new commitments, or promises of new loans, slipped to pounds 2.56bn last month from pounds 2.72bn in August. Net lending, which takes account of loans repaid, fell 18 per cent to pounds 614m from pounds 750m. Adrian Coles, director general of the BSA, said: "The figures continue to present a rather gloomy picture of the housing and mortgage market."

Confirmation of the housing market's fragile state came from new lending figures from the British Bankers' Association, showing property loans stood at pounds 546m in September, down from pounds 597m in August, and pounds 624m a year ago.

Their views were attacked by Ian Shepherdson, economist at HSBC Greenwell. The most important figures were those for new mortgage commitments, he said. The seasonally adjusted figures stood at 43,000, the highest number since February.

"The underlying picture is more buoyant than even these figures show since Cheltenham & Gloucester became a bank in August," he said. "This should have reduced the monthly numbers by about 7,000 yet they have risen. If we are right then housing activity and prices will rebound strongly in the next few months."

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