Despite the continuing recession, as reflected in our recent articles, the past couple of weeks have shown several signs of positive news for the mortgage market.

This includes new figures showing signs such as increased number of mortgage approvals, an increase in house prices and sales, however, the question most prominent is whether this is just a blip or if these are actually signs that the housing market may have bottomed out and is starting to recover.

Experts have warned against assuming this is the case and chief economist for Nationwide, Fionnaula Earley, reaffirmed this:

“While the rise in prices in March is welcome, it is far too soon to see this as evidence that the trough of the market has been reached.”

Mouseprice.com director, Selwyn Lim, gave a different view saying small increases or drops such as the 1.9 per cent drop from Halifax’s March figures on house prices were:

“more of a feature of index volatility than any underlying movement in real house prices”

Mr Lim did however say that increases such as the figures from the Bank of England showing a 19 per cent increase in home loans were much more tangible and commented:

“Those increases in volumes for mortgage approvals [are] encouraging, far more encouraging than the volatility that we’ve seen in the house price indices.”

Other good signs include more mortgage products that are appealing to first time buyers such as the increase in 85 per cent loan-to-value mortgages and the re-appearance of 90 per cent mortgages. Competitive deals like this encourage buyers, increasing competition and stabilising prices if not increasing them.

If the next few months continue to show positive signs such as this then the indication could be much clearer that the housing market and mortgages market have indeed bottomed out.

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