Recovery hope as house sales and lending rise

Hopes of a tentative recovery in the housing market were raised today, after property sales and mortgage lending showed strong monthly increases. House sales jumped 40 per cent in March compared to February, according to figures from HM Revenue and Customs, while data from the Council of Mortgage Lenders showed that mortgage lending rose by 16 per cent to £11.5bn.
 
However, the CML poured cold water on talk of a recovery in the housing market, putting the rise in lending down to normal seasonal variation: "It's a seasonal factor here that people start to look around to move house in the middle of the better weather," said Michael Coogan, the body's director general. He warned that property sales would remain low for the "foreseeable future".

Furthermore, lending in March was still less than half of that for March 2008 and the big lenders, Halifax and Nationwide, say house prices have fallen by around 20 per cent since their peak in the summer of 2007.
 
The HMRC's house sales data paints a more optimistic picture. When adjusted for seasonal variation, the 40 per cent jump becomes a more modest but still significant 13 per cent rise. Meanwhile surveyors have for the past five months reported steadily increasing numbers of enquiries at estate agents from potential homebuyers.
 
In today's Budget, Chancellor Alistair Darling is expected to capitalise on housing market optimism by extending the existing 'stamp duty holiday' on properties worth less than £175,000 to the end of 2009. Some in the mortgage industry are calling for more radical reform: abolishing stamp duty on properties worth up to £250,000. ·