Property: Yes, why not think about buying in time for Christmas?

Nic Cicutti
Saturday 15 November 1997 00:02
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The market may be slowing down in the run-up to Christmas, but demand for homes is still running high, mortgage lenders report. Nic Cicutti finds out whether now is the time to look for your dream property.

It is often said that there are defined home viewing and buying seasons. Viewing is typically something that takes place in the New Year, immediately after the festivities have ended, as prospective purchasers resolve to act on their resolutions.

Offers to buy and subsequent completions of the property transactions is then assumed to take place in the spring. Thereafter there is a summer hiatus, as people go on holiday, followed by a renewed bout of activity in the early autumn, on people's return from their breaks. November and December are supposedly lighter months, when evenings draw longer and few are inclined to traipse round dark, wet streets.

Does the same still apply? Not if you look at the latest statistics. Figures from Barclays Mortgages, a major lender, suggest that an autumn buying peak is becoming established, almost as strong as the traditional spring buying surge.

The lender's research suggests that mortgage lending rose by 10 per cent from October 1996 to the same month this year. This compares with growth of 15 per cent in the 12 months to April. Admittedly, this shows buying still lags behind, but not that much.

The best comparison is to judge the autumn sales against the increase for sales in the rest of the year to date. Average year-on-year growth in the past 10 months stands at 11 per cent, making the autumn season only marginally lower than the rest of the year, including the peak period.

Confirming trends noted by many other surveys, including the key ones from both the Halifax and Nationwide Building Society, plus estate agents, the areas where growth in mortgage lending has been felt most keenly is London and East Anglia. But this survey also points to fast growth in the North-west, pointing to the fact that the improvement in lending is extending beyond the South-east of England.

Jim Chadwick, Barclays Mortgages marketing director, says: "What we are now seeing is a mortgage market which has recovered from the doldrums of the early to mid-Nineties. Despite the increases in interest rates there have been this year, stability seems to be encouraging people to move home. This is proving to be a good time to buy or move."

Barclays' research is based on an index which measures gross new mortgage advances that flow through solicitors' deposit accounts.

Typically, home buyers who arrange a loan will deal with a solicitor who arranges the legal paperwork and passes on the purchase price to the vendor. Barclays has a 30 per cent market share of these accounts, which means that it is able to monitor the flow of funds coming from the full range of lenders in the market.

The key question many buyers will be asking is whether this is really the time for them to venture out into the cold to look at another property.

Here, the survey evidence points to the fact that, compared to three months ago, fewer consumers expect house prices to rise, although a majority still believes they will go up in the next 12 months.

The message appears to be that potential vendors are less likely than before to believe that by holding their properties back they will easily be able to get a vastly better price.

Buyers are still there: for every 10 properties on the market in the North there are 19 people looking to buy, compared to 24 in the Midlands and 20 in the south-East of England. Hopefully, the combination of these two features will lead to reasonable prices being set.

It may also lead to a partial weakening of old, pessimistic assumptions about placing a property on the market in November. For those who think Christmas is all about presents, roast turkeys, port and stuffing, it still will be - but perhaps in a new home.

The Independent has published a free 27-page `Guide to Mortgages', written by Nic Cicutti, the paper's personal finance editor. The guide, sponsored by Barclays Mortgages, is available to all readers by calling 0800 585691. Or fill in the coupon on page 4.

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