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BRITAIN is finally heading out of recession, according to predictions from economic experts.
Economists said HOUSE PRICES fell by less than one per cent in April—and they have not ruled out a small monthly rise.
Meanwhile BUYERS are flooding back to the market—returning at the fastest rate in 10 years.
Banks have turned the lending taps back on with MORTGAGE APPROVALS rising.
And CONSUMER CONFIDENCE is up too, with shoppers finally prepared to go out and spend.
Brokers and bankers were yesterday starting to tear up their gloomy forecasts about the housing market—and now say the meltdown could be over by the end of the year.
Vicky Redwood, UK Economist at Capital Economics, said: “I expect to see a small 0.5 per cent drop in house prices this month, but we could see a rebound.
“The sharp falls in house prices are slowing and easing.
“Overall, it is becoming increasingly clear that the worst for the UK economy is over.”
The cheery news will be boosted by figures on Wednesday that show banks are lending again. Mortgage approvals rose to 29,000 in April, according to statistics from the British Bankers Association.
They are up from 26,097 in March—and up 62 per cent from the November low of 17,895.
Howard Archer, Chief Economist at analysts IHS Global Insight, said: “There is mounting evidence that house price activity has passed its low point and is picking up.”
A spokesman for the Council of Mortgage Lenders said: “There is now a broad consensus that we are at least past the worst in terms of the rate of economic decline.” And home buyers are back. A report by the Royal Institute of Chartered Surveyors shows they are returning at the fastest rate since 1999.
RICS chief economist Simon Rubinson said: “Signs of a pick-up in the housing market have become more broadly based over the past month.
“April was the sixth month in a row that buyer inquiries increased, and they rose at their fastest pace since August 1999.”
Cheap mortgages and low interest-rates have also boosted the market. Last week Lloyds launched a new 95 per cent mortgage for first time buyers, and low interest rates of just 0.5 per cent have helped make mortgages cheaper.
Lloyds, Britain’s biggest lender, has scrapped its old forecast that house prices will drop by 15 per cent this year.
Stephen Noakes, commercial director of mortgages at Lloyds, said: “For the first time people are thinking that house prices will increase over the next 12 months.
“We are seeing some encouraging signs.”
Mortgage guru Ray Boulger, of broker John Charcol, believes house prices will bounce back by three per cent by the end of the year, after bottoming out in a few months time. There’s been a marked change of mood.” Consumer confidence is increasing too and set to rise to a 13-month high, according to a monthly index by market research company GfK.
The Confederation of British Industry’s distributive trades survey for April is this week also expected to show that consumer spending has strengthened.
Howard Archer added: “There are signs consumers are becoming more prepared to spend, thanks to sharply lower mortgage payments and inflation.
The problem remains, though, that consumers are under pressure from sharply higher unemployment, reduced earnings growth and heightened debt levels.”
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