House price recovery postponed to 2013
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by Gill Montia
UK house prices are unlikely to show signs of recovery until 2013, according to Ernst & Young ITEM Club, with prices falling further in the meantime.
The economic forecaster’s view is based on new Bank of England figures which show mortgage approvals in May falling below last year’s levels.
In addition, lenders are expecting credit availability to decline in the next few months, especially for households with high loan-to-value ratios.
The Bank’s Credit Conditions Survey also notes that banks and building societies are facing higher borrowing costs, which are being passed on to their mortgage customers.
To round off the gloom, expectations for house prices are likely to impact negatively on credit availability as the summer progresses, resulting in tighter lending criteria for those seeking a mortgage.
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