Mortgage shmortgage

That which has been believed by everyone, always and everywhere, has every chance of being false.

Hurrah! The number of mortgages granted to prospective home buyers in October was nearly double what it was at the same time last year.

That’s according to the British Bankers’ Association (BBA) which says the figures are a 21 month high. So, cause for celebration surely and throwing hats in the air at the end of the housing-lending-led recession, n’est pas?

Well, probably not. The figures also rose 4% from September, which is also an increase certainly but a very small one and one that’s not likely to do much to really push the housing/house buying/house renovating sector along.

However, many analysts believe that the upward trend in housing market activity is losing steam. Unemployment is high and growth in earnings pretty much non-existent but the unprecedented low interest rates have kept the market artificially protected from the worst ravages. People who can afford – just – to stay in their homes are doing so, meaning most estate agents are seeing a dearth of properties on their books.

It’s pretty much understood that most private RMI work is done by householders within two years of a property transaction – either sprucing them up prior to selling or re-doing all the previous owner’s sprucing up. So a dearth of property transactions will have an adverse impact on RMI work.

Talk to most estate agents and they’ll tell you that those properties that are selling are going to people with cash and no chain and in many areas within days of being marketed.

However, there’s a finite number of those kind of people and once they’ve bought their properties we are back to needing a healthy pull-through of buyers from the bottom of the chain to stimulate not just transactions but housebuilding itself. And there’s the problem. Any slight recovery is stalling, strangled by a lack of first-time buyer affordability and ability to get finance.

Last week’s reports from the housebuilding industry showed that most of them fear that their input costs will rise with no chance of the passing this onto buyers. And one industry analyst is telling his clients to get out of the sector fast.

What’s nice is where Robin Hardy at KBC Peel Hunt suggests investors may be better off – in the home improvement market with names such as Travis Perkins, Topps Tiles and B&Q parent Kingfisher.