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Leaving aside the fact that around 83% of stats are made up on the spot, there have been some interesting stats bandied around in the last couple of days that are worth looking at.

First of all the Q4 2008 housing equity withdrawal statistics issued by the Bank of England show that after mutating into a cash machine for a number of years, an Englishman’s home is once again his castle.

With the strict criteria and low loan to values being enforced by lenders, and falling house prices eroding equity, many borrowers are simply no longer able to raise money against their property. The few that can are heavily outweighed by the number of people consciously overpaying, as well as those simply making normal monthly payments on their repayment mortgages. People’s number one priority in these uncertain times is to put money into their homes, not to take it out.

This behaviour fits in with the zeitgeist of the era. Saving and paying down debt, as opposed to tapping your home for another exotic jaunt abroad, is now in vogue, and as dull as it may seem it is just what the doctor ordered.

A more serious point for the economy as a whole is that many small businesses are traditionally started with borrowing, and often the best security people have to do so is their home. Small businesses are the lifeblood of a healthy economy, and this lack of credit is therefore a further choke on the economy.

On a positive note, today we have seen not only a report that there has finally been a rise in the number of mortgage products available, full marks go to Abbey for some of their recent product releases, but Nationwide have reported that the average house price actually rose by £3,000 last month, from £147,000 in February to £150,000 in March.

This means that year-on-year prices are now down 15% rather than 17% and perhaps gives credence to the view that the bottom is approaching. I still maintain the bottom will have been passed in the next 6 months, and it is only fears over job security and availability of mortgage funding that is holding people back.

This, however frustrating it is, may be no bad thing. A wild bounce back is not necessarily a good thing, rather sensible, sustainable growth is what we should be after now.

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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