Mortgage conditions improving? Tuesday, 17th November 2009

Trading conditions have improved as homebuyers are returning to the housing market reports Barrats, one of the country's largest housebuilders.

Barratt inform us that the number of private reservations per site of land it holds had risen by a third as optimism about the recovery of the property market maintained its levels throughout the second half of the year.

"While trading conditions in the housing market have improved, activity levels will remain constrained until the availability of mortgage finance increases, particularly at higher loan to value levels." Chief executive, Mark Clare, said. He continued saying that the market had 'improved' in the three months to November and overall prices had risen, but he warned that the ongoing drought of mortgage products continued to pose a threat to the recovery of the sector.

Rival housebuilder Persimmon yesterday reported a healthy order book and reduced debt levels.

Mike Farley, Persimmon chief executive, said interest from first-time buyers had improved, with 18% of sales across the group now being to those just getting onto the property ladder, compared to 10% in 2008.

Their focus towards building houses rather than apartments has also helped them as they had seen more people wanting to live in family homes.

But there was concern about the potential impact of rising unemployment and the potential impact of the upcoming general election, leading to uncertainty which could discourage people from investing in the property market.