Property interest grows

Good news at last on the housing front. The British Bankers’ Association has said the number of people given a new loan to buy a home leaped by 27 per cent in December.

In November there were 17,339 approvals for mortgages. But that figure rose to 22,051 a month later in December.

In many parts of the UK estate agents are beginning to report signs that things might be picking up in property. There are certainly large numbers of buyers out and about encouraged by reports of bargains and the government’s continuing attempts at trying to lessen the mortgage drought.

Cash remains king and for anybody with sufficient funding the market in both residential and commercial property is throwing up attractive opportunities.

But the market is still very fragile and there are no real indicators as yet that the economic storm is beginning to pass.

The widely held view is that although the number of mortgage approvals increased it would be prudent to see it as the market beginning to stabilise rather than suddenly recovering its upward trajectory of the boom years in the past. When the property market was booming mortgage approvals were touching 80,000 a month.

Property is still subject to the tumult sweeping through the rest of the economy. Steel maker Corus is laying off 3500 people. The closure of Barratts the shoe chain which is part of the Stylo group, plus major job cuts at Wolseley, the building materials group and Philips cutting 6000 jobs at its TV plants, all have a knock-on effect on property values.

Virgin Atlantic is making its 9000 workers take a pay freeze to avoid redundancies. British Airways says it will make a £150m loss this year. It pays bills in Euros and US dollars and has major operations in European and US airports. It also has to pay overflying fees paid to countries for using their air space. Sterling touched a new low against the dollar of $1.35 and the Euro is almost at parity with sterling.