Forum Brief: Housing market

Record numbers of British homeowners are switching to fixed rate mortgages.

Meanwhile, the low mortgage costs are also helping to tempt first-time buyers back to the market. July was the best month this year for first-time buyers, according to data from the Council of Mortgage Lenders.

And figures from the Building Societies Association show that building society lending increased by 30 per cent in July.

Forum Response: Council of Mortgage Lenders

Michael Coogan, director general of the CML, said: "July's figures support the picture of a housing market that remains stronger than expected. The apparent increase in first-time buyers in July is welcome, as their numbers have been seriously depleted in recent months.

"We do not anticipate any shocks to the market that would cause serious problems. However, neither is the current buoyant situation likely to continue indefinitely - to some extent the market is making hay while the sun shines.

"We continue to expect house price inflation to slow down looking ahead into next year. The risks of a correction have not gone away, and borrowers should remain wary of over-committing themselves."

Forum Response: National Association of Estate Agents

Peter Bolton King, chief executive of the NAEA, told ePolitix.com: "These new studies actually support claims from our members that first time buyers are beginning to come back into the market. Our surveys are very up to date and provide accurate summaries of the current state of the market.

"In terms of the figures showing that record numbers of British homeowners are switching to fixed rate mortgages, it is interesting that over the last ten days or so, these fixed rates have started to creep back up.

"It will be interesting to see whether or not this has an effect. Personally I don't think it will because the fixed rates are still very low."

Forum Response: The Building Societies Association

Adrian Coles, director general of the Building Societies Association, said: "Building societies' success in the mortgage market continues, with gross advances up to the highest figure since August 1988, when the building society sector was much larger.

"Competitive products and long term commitment to customers makes building societies an attractive option for mortgage borrowers."