Thursday, 15 April 2010
UK Mortgage Rates and Mortgage Approvals – April 2010 Update
Compare this with the consumer price index (CPI) of 3.0% and importantly the retail price index (RPI) of 3.7% and it says that the average mortgage is almost free money. UK 10 year bond yields are now even at 4.05% so I just don’t know how much longer mortgage rates can remain this low. Who today would you prefer to get your yield from – the average home owner or the UK government? The answer should normally be easy but given the state of the UK public finances you might have to think twice today.
The second chart shows mortgage approvals. Non-seasonally adjusted rates are up month on month by 36% to 40,622 for February 2010 however as the chart shows this is a very noisy and erratic data set. Seasonally adjusted shows mortgage approvals as almost flat by being down only 2% to 47,094 for February 2010. It’s interesting though that even with almost free money on offer mortgage approvals are not really rising. Can the Labour government and Bank of England keep the plates spinning much longer? It’s certainly going to be interesting to watch what happens to the housing market over the spring period.
As always DYOR