An April spring in the housing market could give hope that a turnaround is gathering momentum, a Tayside property expert has said.
Lindsay Darroch, partner and head of property at Blackadders, said the April spike should be looked at cautiously but he still feels 2013 should show a slow but steady improvement locally.
Mr Darroch was speaking after a report from the Council of Mortgage Lenders (CML) revealed that lending rose by 4% in April and by 21% on April last year.
He said: “I would offer a slight note of caution when comparing year on year as there was a big drop-off in April 2012 due to the end of the stamp duty holiday on March 31 2012.
“However, there is no getting away from the underlying trend that April is one of the strongest months for lending activity since 2008.
“The cautiously optimistic view certainly chimes with my opinion and I think that 2013 should show a slow but steady improvement.
“The only caveats to that are the usual ones in relation to an unexpected development in Europe or another economic crisis. I am concerned regarding the surge in the FTSE and other stock markets around the world, which is being fuelled by cheap money rather than reflecting improving economic conditions.
“What happens when the life support system of quantitative easing is turned off?
“There have also been some interesting announcements from the Scottish Government in relation to their support for the housing market, both through rent to buy and a mortgage guarantee scheme.
“I am delighted that both UK and Scottish Governments have woken up to the importance of the housing market to the economy as a whole. My hope is that these schemes will stabilise the housing market and encourage banks to start funding residential developments.”
According to the CML, first-time buyers in March also accounted for 45% of all house purchase loans.
The average loan-to-value ratio for first- time buyers remains at 80% but there has been an increase in the proportion of first- time buyers taking out loans with a deposit of 10% or less.
Mr Darroch added: “The overall market volumes are historically still very low and, while the percentages are moving in the right direction, the volumes are not. There were 19,100 loans advanced to first-time buyers in March 2013 compared to 24,400 loans advanced in March 2012.
“This is not a surprise as March 2012 marked the end of first-time buyers’ stamp duty holiday, which resulted in a significant spike. However, it does show that a sustained recovery in the property market is still some way off.”