However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year [...]]]> Property sales hit their highest monthly level of the year so far in November figures from HM Revenue and Customs (HMRC) have shown.There were 85,000 property sales during the month, up from 79,000 in October, it said.

However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year was lower than the same period in 2010.

The property market has been subdued for some time.

Since 2007 sales have been weighed down by the continued rationing of mortgages and the initial reluctance of sellers to drop their asking prices.

There have also been concerns among potential buyers about the state of the economy and the outlook for their jobs.

The HMRC figures show that there were 9,000 more property sales in November, compared with the same month the previous year.

The new monthly total was the highest since July 2010.

However, in the first 11 months of 2011, there were 787,000 sales compared with 810,000 in the same period of 2010.

However, the latest Rics survey shows a slight rise in buyer demand [...]]]> A growing proportion of surveyors and estate agents believe that economic uncertainty is holding back housing market activity.This was considered to be a bigger reason than the availability of mortgages and worries about house price falls, the Royal Institution of Chartered Surveyors (Rics) said.

However, the latest Rics survey shows a slight rise in buyer demand and sales in November with price changes continue to show regional variations.

New buyer enquiries “increased modestly” for a third consecutive month, the Rics survey showed.

The average number of sales per surveyor branch climbed to 15.4 in the three months to the end of November, compared with 15 a month earlier. This was the highest level since last September.

Slightly more surveyors expected sales to increase in the coming months than the number who expected sales to fall.

However, these slight rises were coming after a sustained period of subdued activity. More surveyors expect prices to fall in the coming months, than the number who expected prices to rise.

Annual house price changes

• England: down 0.2%
• Wales: down 0.5%
• Scotland: down 1.5%
• Northern Ireland: down 12.1%

“A meaningful recovery still seems some way off,” said Alan Collett, Rics’ housing spokesman.

On a regional basis, London registered a rise in annual house prices of 3.9%, whereas prices dropped by 4.6% over the same period in the north east of England.

The OBR also predicted that house prices would rise at levels above inflation from the same year, [...]]]> Housing market activity will improve in 2013 after a stagnant few years according to forecasts from the Office for Budget Responsibility (OBR).It said there would be a 20% rise in transactions in 2013/ 14, compared with the previous year.

The OBR also predicted that house prices would rise at levels above inflation from the same year, reaching annual growth of 4.5% in 2015-16.

Sales have been at comparatively low levels during the period of economic turmoil, owing in part to lenders’ caution when handing out mortgages, buyers’ worries about their jobs, and sellers’ unwillingness to reduce asking prices.

The latest figures from HM Revenue & Customs showed that 76,000 homes were sold in October, which was 1,000 more than in September, but still 3,000 fewer than in October last year.

It means that sales for the year so far have been 5% down on 2010.

However, the OBR – the independent, but government-funded, economic forecaster – said that this would change in a few years.

It predicted that transactions would fall by 3% in 2011-12, grow by 1.5% the following year, but then surge by 20.7% in 2013-14.

Meanwhile, house prices will fall by 0.9% in 2011-12, dip by 0.1% the following year, then rise by 2.7% in 2013-14, and increase by more than 4% in each of the next three years.

The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month [...]]]> Economic uncertainty makes the future of the UK mortgage market “difficult to call”, a mortgage lenders’ group has said.Paul Smee, director general of the Council of Mortgage Lenders (CML), said the market for home loans was currently stable.

The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month before, the CML said.

First time buyers needed an average deposit of 20% of a home’s value.

The number of mortgages approved for house purchases was 3% higher than in September 2010.

However, mortgage lenders have suggested that the cost of loans has started to rise because banks are charging more to lend to each other.

The rising cost has resulted from banks’ confidence in lending to each other being knocked by the eurozone crisis, and Mr Smee said this made the future for the mortgage market more difficult to predict.

“Although both house purchase and remortgage loans experienced a small drop in September the overall market to date shows a stable picture,” said Mr Smee.

“However, the backdrop of global and domestic instability makes the future more difficult to call.”

Over the third quarter of the year, the number of home loans advanced for house purchases was up 16% compared with the previous quarter at 144,200.

This was 6% lower than the number in the same period in 2010.

The number of homeowners remortgaging in the third quarter was up 23% on the same three months in 2010.

However, the latest figures show the steam might have come out of the remortgaging market, with the number of remortgaging loans approved in September down slightly on the previous month.

The number of loans taken out by first-time buyers rose slightly in September from a low base.

The level of deposit required remained unchanged compared with August, but had eased compared with a year earlier.

This increase follows a rise in the rate at which banks lend to each other – Libor – which has been [...]]]> Mortgage interest rates could start to rise again as a result of the turmoil in the eurozone brokers are warning.Some lenders, including Woolwich, Halifax and Santander, have pushed up their tracker rates for new borrowers.

This increase follows a rise in the rate at which banks lend to each other – Libor – which has been inching higher amid worries over the eurozone crisis.

The increase in Libor indicates that banks are less confident about lending to each other.

Although the average tracker rate has hardly altered since the summer, there are straws in the wind which suggest that the direction could be shifting from down to up.

On Wednesday, the Chelsea Building Society put up the cost of some of its most competitive tracker mortgages by 0.2%.

In recent weeks, the Halifax raised its two-year tracker by 0.15% to 3.34%, while Woolwich increased the rate its trackers revert to after two years by 0.4%.

Santander pushed up its Abbey-branded lifetime tracker in two moves from 2.95% to 3.09%. Nationwide and ING have also raised some rates as well.

One indication of the pressure on lenders comes from Libor – the London Interbank Offered Rate – the short-term interest rate at which banks will provide funds to each other.

While some lenders draw mostly on their customers’ savings to fund mortgages, others have to borrow large amounts on the money markets, hence the importance of rates such as Libor.

Since August, three month sterling Libor has risen from 0.83% to 1%.

This is a significant change compared with the Bank of England’s key rate, which has been stuck firmly at 0.5% since March 2009. On Thursday, the Bank said it would keep rates on hold again following the latest meeting of the Monetary Policy Committee.

The figures suggest that this year’s modest revival in sales has ended and that mortgage [...]]]> The number of new mortgages approved for home buyers, but not yet lent, fell in September for the first time in five months.The Bank of England said approvals for home buyers were 50,967 in September, down 1,380 or 3% from August.

The figures suggest that this year’s modest revival in sales has ended and that mortgage related sales may fall again in the coming months.

In September, completed sales fell for the second month in a row, to 72,000.

The figures from HM Revenue & Customs (HMRC) showed that sales last month had fallen by 11,000 from the July peak of 83,000.

Prices are likely to trend down over the coming months in the face of very low consumer confidence amid persistently weak economic activity, markedly rising unemployment and muted earnings growth.

The committee cited a sharp deterioration in the international outlook as a key factor.

The vote [...]]]> The Bank of England’s Monetary Policy Committee (MPC) was unanimous in voting for another £75 billion of quantitative easing (QE) to support the weak UK economy.Minutes from the MPC’s meeting earlier show members considered injecting between £50 billion and £100 billion.

The committee cited a sharp deterioration in the international outlook as a key factor.

The vote for more QE marked a sharp turnaround in the members’ positions.

At the previous meeting in September only one MPC member, Adam Posen, had pushed for more QE.

All members voted to keep interest rates unchanged at their record low of 0.5%, despite inflation running well above the 2% target rate.

Figures released on Tuesday showed consumer price inflation rose to 5.2% last month.

The MPC’s minutes showed that the committee was expecting inflation to be above 5% in the near term, boosted by increases in energy prices.

But its view is that domestically generated inflation had remained contained and would fall back next year.

In a speech on Tuesday evening, the governor of the Bank of England, Mervyn King, said inflation would fall sharply in 2012 when the January 2011 rise in VAT dropped out of the data and the effect of past oil price rises started to fade.

The MPC minutes echoed this, saying that there was “little further upside news” on the outlook for inflation. In fact, the Bank was more concerned that without extra QE, that could fall below target.

They also pointed out that financial markets were trading on the expectation that UK and US interest rates would remain unchanged for two years.

The MPC said it did not expect the impact of this round of QE to be materially different to the £200 billion of purchases made between March 2009 and February 2010.

A Bank report into the effect of the first round of QE found the stimulus measure helped gross domestic product increase by about 1.5% to 2%

It said there had been a mixed pattern of monthly changes in prices, but [...]]]> House prices are “lacking genuine direction”, according to the Halifax, as it reported a 0.5% fall in values in September compared with August.Prices were down 2.3% from a year ago, leaving the average home in the UK worth £161,132, the lender said.

It said there had been a mixed pattern of monthly changes in prices, but broad stability overall.

And the lender said it expected little change in prices and activity during the rest of the year.

“Greater uncertainty about economic and personal financial circumstances, together with pressure on householders’ finances from weak earnings growth, higher inflation and increases in taxes, are likely to be constraining housing demand,” said Halifax housing economist Martin Ellis.

“Despite these pressures, low interest rates and a rise in employment over the past year, have been supporting the market.”

Prices in the three months to September were 0.1% higher than the previous three months.

The report of static house prices from the Halifax’s lending data chimes with the latest figures from the Nationwide. The building society said last week that prices were “treading water”.

However, the latest statistics on mortgage approvals from the Bank of England may suggest that sales funded by mortgage borrowing could pick up this autumn.

It said the number of new mortgages approved, but not yet lent, for home buyers rose to 52,410 in August – its highest monthly level since December 2009.

The monthly picture so far this year from the Halifax is one of with four rises, four falls and one month of no change in prices.

Recent data from the Land Registry showed that prices in London had risen by 2.1% in the year to August, compared with a 7.8% fall in the north-east of England.

In August, the index had read 52.6.

Markit said fewer new orders was the reason behind the slowdown, but [...]]]> Activity in the UK construction sector slowed to “near stagnation” in September, a closely-watched survey has suggested.The Markit/Cips construction purchasing managers’ index (PMI) fell to 50.1, just fractionally above the 50 “no-change” threshold that separates expansion from contraction.

In August, the index had read 52.6.

Markit said fewer new orders was the reason behind the slowdown, but added that staffing levels rose slightly.

Confidence in the sector remained relatively subdued, the research group said.

Also last week as the Re-Mortgager reported, builders’ merchant Wolseley announced a return to full year profit but said recent weaker economic forecasts were likely to have an impact on its markets.

On Monday, Markit/Cips data showed surprise growth in the manufacturing sector.

Wolseley reported a pre-tax profit of £391 million in the year to July, compared with a £328 [...]]]> Building and heating materials group Wolseley has returned to a full year profit in 2010/11.The group suffered when the housing market was hit during the recession, but said it had focused on improving its “customer, product and vendor mix”.

Wolseley reported a pre-tax profit of £391 million in the year to July, compared with a £328 million loss a year earlier.

It said markets were broadly stable but there had been “no strong rebound in activity after the recession”.

Sales revenues rose 3% to £13.6 billion.

The group also took a £39 million charge on its Bathstore and BCG brands in the UK, “reflecting a deterioration in the outlook for retail markets”.

It added that in the current environment, it remained cautious about its cost base.

“Recent economic forecasts have weakened, and over time this is likely to have an impact on our markets,” said chief executive Ian Meakins.

The company has been selling off units as part of a disposal strategy over the past 18 months.

In July, it sold its French distribution division Brossette and British Build Center business to France’s Saint-Gobain for £310 million.

Money would also be offered to the Scottish and Welsh administrations, which will choose [...]]]> Money to extend a council tax freeze in England to 2012-13 has been unveiled by Chancellor George Osborne.The government cannot force councils to freeze bills but it is offering to give those that limit spending rises to 2.5% the money they need.

Money would also be offered to the Scottish and Welsh administrations, which will choose how it is spent.

The £805 million move will be funded by efficiency savings but Labour said it would save people just £72 a year.

A similar pledge was included in the coalition agreement and resulted in all local authorities in England freezing or reducing their council tax bills in 2011-12.

Scotland will get an extra £67.5 million in its block grant but ministers are still deciding how to spend it. The SNP has already pledged to freeze council tax for five years.

The chancellor is under pressure to spell out detailed plans to get the UK economy growing again amid mounting criticism from Labour and senior figures in his own party.

The government had “activist” policies on dealing with the deficit, keeping interest rates low and cutting corporate taxes and more investment in apprenticeships, he said.

It is not unusual for some to spend less than expected and this time the chancellor will seize the money to ease household bills.

The key point from the Treasury’s point of view is that this does not change the overall spending plans or the deficit reduction strategy.

He cited the increase in time an employee has to work before they can claim unfair dismissal as an example of how the government will lift the burden on business.

With business groups calling for further help, Mr Osborne said his corporation tax cut from 28% to 23% – announced in March’s Budget – was a “real sign of our commitment to getting business growing.”

The bulk of Mr Osborne’s plans will not be announced until November in the second phase of the government’s growth review.

It was the third fall in the past four months and means the annual rate of house price decline has changed little [...]]]> House prices in England and Wales continue to stagnate, according to the latest figures from the Land Registry.Average prices fell by 0.3% in August to £162,347, leaving them 2.6% lower than a year ago.

It was the third fall in the past four months and means the annual rate of house price decline has changed little during that time.

With small fluctuations each month, house prices in England and Wales have hardly changed since the end of 2010.

The Land Registry said that prices in London continued to diverge strongly from the rest of the country.

They rose by another 0.5% last month and are now 2.1% higher than they were a year ago.

This makes London the only region to experience a rise in prices in the past year, with property prices now averaging £348,686.

By contrast, in that time prices have fallen by 7.8% in the North East of England and by 5.5% in Wales.

The continued stagnation of prices and sales has been mainly due to the rationing of mortgage funds by banks and building societies, which has been in force since the height of the banking crisis in 2008.

A report from the Bank of England – its latest quarterly Credit Conditions Survey – has found that lenders continue to find it difficult to raise funds in the financial markets, which they can then lend to customers.

Lenders told the Bank that there had been more demand for mortgages in the third quarter of this year.

And they expected to be able to offer a little more money to would-be borrowers in the coming months.

But the Bank warned that things might take a turn for the worse.

“In both the household and corporate surveys, lenders pointed to adverse wholesale funding conditions as a key factor which might constrain future lending,” the Bank said.

“More recent discussions with some of the major lenders suggested that although these factors had not yet led to reduced credit availability, a period of sustained tight funding conditions could act to constrain their ability to extend loans going forward,” it added.

Barclays said it had cut complaints by 14% compared with a year [...]]]> More complaints were made about Barclays than any other banking brand by UK customers in the first half of the year, figures have shown.The bank received 251,563 complaints, with 53% of closed cases upheld in customers’ favour, the Financial Services Authority (FSA) figures show.

Barclays said it had cut complaints by 14% compared with a year earlier.

Other banks high on the list included Lloyds TSB (181,907), Santander (168,888) and NatWest (147,109).

The data pulls together figures released in recent weeks by banks.

Nearly 10,000 complaints were filed every day to financial institutions, with a total of 1.85 million made in the first six months of the year.

The FSA figures showed that, among the most complained-about banking brands, Santander was the most likely of the major brands to deal with cases within eight weeks.

It closed 98% of cases within that timeframe. This compared with 74% at Royal Bank of Scotland, 77% at Lloyds TSB, 86% at NatWest, 89% at Barclays and 90% at HSBC.

Complaints were dominated by those about payment protection insurance (PPI), especially after banks lost their legal challenge on PPI rules in April.

PPI is supposed to cover borrowers’ loan repayments if they fall ill, die, or lose their jobs.

But mis-selling cases led to new rules on how cases should be dealt with, and also created an extra compensation bill running into billions of pounds for the banks.

The FSA’s complaints figures are published relating to banking brands.

Barclays headed the list but said the number of complaints had fallen by 14% compared with the same period a year earlier.

“We want to get it right every time. When we do get it wrong, we apologise, try to correct it quickly and identify how to prevent it from reoccurring,” said Antony Jenkins, chief executive of Barclays Retail and Business Banking.

“We have made good progress in reducing complaints with a substantial and sustainable reduction in banking complaints by nearly a third.”

“However, there is much more to be done and we are working hard to further improve our service to our customers, putting them at the heart of our business and getting it right first time, every time.”

The largest group – Lloyds Banking Group – had most complaints when all its brands were added together.

Some complaints that are unresolved by the banks themselves end up with the independent Financial Ombudsman Service. It recently said that the largest number of these complaints, in the first half of the year, also related to Lloyds Banking Group.

It also said that nearly two-thirds of the new complaints made in the six months to the end of June were about PPI.

In some cases flat-owners have been asked for payments of tens of thousands of pounds by those [...]]]> Flat owners’ complaints about service charges have risen by 46% in two years to 7,600, figures show.They queried the amount they were being asked to pay for maintenance and repairs, the Leasehold Advisory Service for England and Wales said.

In some cases flat-owners have been asked for payments of tens of thousands of pounds by those who manage the blocks they live in.

But an agents’ association said actual numbers of complaints remained low.

There are 2.5 million leaseholders across England and Wales.

That refers to people who own their own flat, but who are obliged to pay maintenance and service charges to the owner of the freehold.

The flats can be part of a block, or an individual house.

Just over 7,600 queries or complaints about one-off charges have been recorded in the last year, according to the Leasehold Advisory Service. That is a 46% increase over two years.

Anthony Essien, chief executive of the service, puts that down to the fact that more people are worried about their finances in tougher economic times.

But he also said that some managing agents could be overcharging flat-owners.

“There must be, on occasion, some poor behaviour,” he said. “It happens.”

Overall he believed that the situation was not as bad as in the mid-1990s.

“However that does not mean that there are not mistakes made, and overcharging.”

In some cases that could be more than they actually paid for the flats in the first place.

Any recommendations his committee makes before the end of the year could be applied across the country.

“There are a lot of unhappy people out there, and a lot of people who do not understand what they are paying for and what they are getting. I hope we can help them,” he said.

In the early part of this decade, half the homes being developed were flats, as a result of the property boom. That is much higher than the long-term trend.

There are now twice as many leaseholders in England and Wales than there used to be.

Under the 1985 Landlord and Tenant Act, leaseholders have the right to examine any receipts for maintenance work.

That work has to be deemed “reasonable”.

If not, leaseholders can take their managing agents to a Leasehold Valuation Tribunal.

But, despite that safeguard, some in the industry are highly concerned that the whole business of property management remains unregulated.

However, countries like France and Australia take a very different view. They have a system whereby property managers are licensed.

However, the [...]]]> The number of properties sold in the UK fell to 78,000 in August, figures from the official tax authority show.This was 6,000 fewer sales than in July – which had seen the highest total for a year – although a drop is often recorded in August during what is traditionally a quieter holiday month.

However, the figure was down 3,000 compared with August 2010, HM Revenue and Customs (HMRC) said.

At the height of the property boom in July 2007, 151,000 homes were sold.

Since 2007, sales have been weighed down by the continued rationing of mortgages and the reluctance of sellers to drop their asking prices.

Separate figures published by the Council of Mortgage Lenders (CML) showed that UK mortgage lending rose by 6% in August compared with July.

Gross mortgage lending stood at £13.4bn in August, up 10% on the same month a year ago. The CML said that the overall picture for mortgage lending was subdued, but stable.

The cost rose [...]]]> The cost of renting a home is rising at its fastest rate in a year – with the average tenant paying £713 a month, a new survey has announced.Tenants paid 1.2% more on average to rent a property in the UK in August than they did in July, according to LSL Property Services.

The cost rose quickest in Wales and the South East of England in the last month.

Tenant arrears increased for the first time since April, the survey added.

“We are in the thick of the busiest time of year for the rental market, and red-hot demand for properties is driving rents up at their fastest monthly pace in the last 12 months,” said David Newnes, LSL’s estate agency managing director.

“Recent graduates moving for their first jobs have further exaggerated the long-term and growing demand from frustrated buyers.  In the last two years, average rents have risen by more than £50 a month.”

The survey from lettings agent LSL, which owns Your Move and Reeds Rains, suggested that London had seen the biggest rent rises in England and Wales in the last year, rising by 6.6%, followed by a 6% rise in the West Midlands and a 4.3% increase in the North East of England.

The only fall was in Yorkshire and the Humber, where the cost of renting a home dropped by 0.5% in the last year, it suggested.

Tenant arrears increased for the first time since April, with 10.7% of all UK rent unpaid or late by the end of August. This was up from the 9% of rent unpaid or late in July.

However, Mr Newnes said there was often a short-term blip in tenant arrears in August, as summer holiday costs squeezed family finances.

The announcement came as Kingfisher reported [...]]]> Kingfisher plc- the owner of B&Q and Screwfix has announced that it is creating 1,200 jobs across the UK this year.Kingfisher said that its growing business would take on 230 staff at 29 former Focus DIY stores. One thousand new jobs are also being created at trade tools supplier Screwfix.

The announcement came as Kingfisher reported sharply higher profits.

Pre-tax profits at the group rose 24% to £439 million in the six months to the end of July.

Kingfisher said it was investing £130 million in the UK this year, four times the previous year.

That includes £20 million it is spending refurbishing the Focus DIY stores it bought earlier this year.

It has already opened 13 new Screwfix outlets this year. It expects to have opened another 40 by January 2012.

“Although the economic outlook is uncertain, this investment demonstrates our confidence in the UK’s longer-term growth prospects,” said Kingfisher chief executive Ian Cheshire.

Shares in Kingfisher jumped 5% at the start of trading on Thursday, as markets responded to the unexpectedly strong profits figure.

The company saw a 6% rise in profits at its UK and Irish Republic business – including a 25% jump at Screwfix – despite a 1% fall in sales in its home market.

Kingfisher’s overseas business was even more robust, with profits in France up by a quarter, and Germany, Spain, Turkey and Poland all putting in a strong showing.

“With around two-thirds of our profit coming from outside the UK, these results clearly show the value of geographic spread,” said Mr Cheshire.

“Looking ahead, economic uncertainty throughout Europe is likely to impact consumer confidence, meaning conditions will remain challenging for retailers.  However, our plans already assumed little help from our markets.”

More surveyors reported price falls than price [...]]]> Economic uncertainty and a lack of mortgage lending led to the sluggish housing market, the Royal Institution of Chartered Surveyors (Rics) said.Fourteen homes were sold per UK estate agent in the three months to August – the lowest total for more than two years, a survey has found.

More surveyors reported price falls than price rises in August, Rics said.

And an increasing proportion expected prices to drop further in the next three months.

“The risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers, even where mortgage finance is available,” said Alan Collett, housing spokesman for Rics.

The Rics report reported that surveyors regarded economic uncertainty as the biggest factor affecting activity in the housing market, followed by a lack of mortgage finance.

A smaller number considered that buyers and sellers were staying away from the market because of fears over further house price falls.

The Council of Mortgage Lenders said last week that first time buyers were typically having to find a deposit of 20% of the purchase price to get a home loan.
School effect

House prices in year to July

• Wales: down 0.1%
• England: down 1.5%
• Scotland: down 1.8%
• Northern Ireland: down 4.1%

Source: Department for Communities and Local Government

Often this was because they had bought at the height of the market, had found it easy to get a 100% mortgage, but now needed a bigger home having had children or found a partner.

Nationally, Rics said that prices continued to increase in London, with prices falling the most in East Anglia and the West Midlands. Scotland and Northern Ireland also recorded house price falls, the survey said.

In the last year, prices have fallen the most sharply in Northern Ireland (down by 4.1%), according to the government’s own house price survey.

Property prices fell by 1.8% in Scotland in the year to July, and dropped by 1.5% in England and 0.1% in Wales, the Department for Communities and Local Government (DCLG) said.

It said that UK house prices fell by 1.5% over the year to July.

However, it said prices rose by 0.3% compared with June, making the average home worth £207,690.

Prices paid by first-time buyers were 0.5% lower on average compared with a year earlier and prices paid by former owner occupiers decreased by 1.9% over the same period.

The number of first-time buyers, at 18,200, fell back by [...]]]> The number of mortgages lent in July was still much lower than a year ago, figures from the Council of Mortgage Lenders show.The number of new loans to house buyers was 48,400 in July, up 1,000 from June but still 6,900 lower than a year ago.

The number of first-time buyers, at 18,200, fell back by just 300 from June and was 1,300 down on a year ago.

First-time buyers are still having to put down deposits averaging 20% of their purchase price to obtain a loan.

“August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months,” said the CML’s director general Paul Smee.

“However, it is likely that this reflects weak consumer appetite for borrowing, more than any additional constraints on the availability of mortgages,” he said.

Figures from the Bank of England showed that in July 49,239 new mortgages were approved, but not yet lent, to house buyers. That represented the third monthly increase in a row and would normally suggest an impending upturn in sales.

With house prices rising slightly so far this year, the average new mortgage has gone back up to £120,000, the CML said.

As a result, the total amount of money involved in the new loans in July rose to £7.3bn from £6.9bn in June, putting gross lending at its highest level since August last year.

It warned those on lowest incomes were likely to [...]]]> Household budgets could be squeezed for the next 10 years as the impact of tax rises and cuts is felt, the Institute for Fiscal Studies (IFS) has warned.Its survey suggests families have seen the biggest fall in living standards in 30 years in the last financial year.

It warned those on lowest incomes were likely to suffer a further significant reduction in their spending power.

The IFS cross-country study found that UK households had been relatively insulated from the immediate impacts of the recession, partly because of state welfare systems and increases in state financial support.

It said much of this protective effect was concentrated on households in the bottom half of the income distribution.

But it said earnings, state benefits and tax credits had all fallen in real terms in the UK over the past year.

IFS researchers estimated this was likely to have led to a fall in median net household income of 3.5%, the largest single-year drop since 1981, returning it to its 2003-04 level.

The pain of the recession had been delayed rather than avoided, they concluded.

Robert Joyce, a research economist at IFS and a contributor to the report, said: “The current economic downturn began more than three years ago, and may seem like old news.

“But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt, and will continue to be felt for years to come.”

Previous IFS research has shown that the decline in average living standards looks set to continue until at least 2013-14.

There have been a growing number of calls in recent weeks from opposition politicians and some economists for the government to rethink its programme of spending cuts in the light of weak economic growth, not only in the UK, but also in Europe and the US.

The latest report found that the fall of 6% in UK GDP from peak to trough during the recession lies somewhere in the middle of the international experience.

The Irish Republic, Japan and Sweden had experienced sharper falls, whereas countries such as Canada saw smaller falls.

The rate of employment fell by a good deal less than GDP – by 1.6 percentage points between 2007 and 2009, the IFS said.

Again, this was roughly in the middle of the global experience. Over the same period, the employment rate rose in Germany, was almost unchanged in France and fell by more than four percentage points in the US.