more encouraging data for us and uk housing market released
News Posted On: 26 October 2009
Data released on Friday by the National Association of Realtors (NAR) showed US home resales had surged by 9.4 percent to their highest level in over two years in September.
NAR reported that annual sales figures were now at the highest level since July 2007, up from 5.09 million last month to 5.57 million units.
On the same day the UK The British Bankers' Association reported that the number of mortgages approved in September jumped 76.8 percent on a year-on-year basis in September. The monthly statistics for home loans were also up from 40,841 in August to 42,088 last month.
"Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover. Housing market activity will depend, however, on more properties coming on to the market," said BBA Director of Statistics David Dooks.
Meanwhile the recovery is still tentative. The big news on Friday was that the UK economy is still not technically in growth. Economists were 'shocked' by the 0.4% contraction in Q3 GDP, having expected the first quarter of growth since the crash. Sterling immediately lost a percentage point against the dollar on the news.
"It's fair to say that these figures might be an argument that the Bank of England will be using to expand QE... It clearly tilts the balance in favour of those who wish to expand the programme," said Commerzbank economist Peter Dixon. If so this can only put further pressure on Sterling.
Recent surveys have shown a continuing recovery in the UK and US property markets, helped by record low interest rates and the pumping of money into the system, whether by 'quantitative easing' (QE) or other fiscal stimuli. It seems the UK government is stuck between a rock and a hard place – being unable to raise interest rates in order to protect currency value since this would derail the fragile recovery. This is helping drive a move into hard assets like property.
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