Economy

Fears over a property bubble with over inflated prices causing many people to borrow more in order to get on the housing ladder. It is a 6 year high for residential house sales, the highest peak since 2008.The increase can be related to more relaxed credit lending and a more confident consumer. Over Christmas lending was almost double of that in the same period in the previous year. Growing availability of affordable mortgages has released some pent-up demand from a market that, in recent years, has seen many viable buyers unable to enter the market, said Peter Bolton-King director at RICS.

On the face of it, this seems like good news but unless we see a marked increase in the number of homes coming up for sale we could well be looking at a price rises becoming unsustainable in some areas. Mortgage approvals are on the increase, lending is up approximately 15 percent when compared to the same period in the previous year. If you look further into this, this can also be attributed to government schemes aimed to help first time buyers through shared equity schemes.

Update June 2016:

Mortgage lending rates have seen a fall since the rush to beat stamp duty changes announced in the last budget came to an end. There was a spike in mortgage lending during March as the new higher stamp duty rates changes date approached, followed by a sharp drop during April. These changes caused a rush on the housing market as people were trying to snap up available properties before the stamp duty increases came into effect. According to recently released figures from the British Bankers' Association, a total of 78,301 loans were approved during April, which was down almost 5,000 in number from 82,971 mortgages approved during March. Loan values also slumped, falling to £10.9bn in April from £16.1bn in March. While the sharp rise and fall in mortgage approvals can be attributed to the changes in stamp duty, overall mortgage lending is still continuing to rise quickly on an annual basis.

According to the figures there was a 5,000 increase in the number of loans granted in April 2016 when compared to April last year, and the value of those loans was worked out to be 12 percent higher year-on-year. Landlords scrambling to buy up properties before the extra stamp duty rates came into effect meant that banks and building societies issued more loans during March this year than in any other month since November 2007.Chief economists are predicting a brief slowdown of house sales across the housing market over the next few months as a result of the uncertainty over the EU Referendum. However, they expect a renewed rise in sales and house prices next year as the market settles down. Looking for Banking? We can help.  Check out our Barclays Fast Track Banking service! We are proud to provide all of our clients with Barclays fast track banking.

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The trade deficit the UK faces has decreased to £3.2 billion in the November period. This can be directly associated with the higher exports of goods to Europe. The UK exports of products increased by 2% between October and November - the total being £25.3bn. The reason for this increase is mainly due to the increase of trade with the European Union.The main exports which have helped increase the exports to the EU are being attributed to Chemical Export. However the UK has also started to import more from the EU. The current amount imported is at an all-time high of £19.2 billion attributed to European car manufacturers.It`s not all good news; forecasters are predicting long term exports to fall over the coming years. This will result in a widening trade deficit something the government will want to tackle.

Update June 2016:

UK trade deficit falls after record rise in exports

2016 is proving to be a good year for reducing the UK trade deficit according to recently released figures. In fact the volume of goods exported from Britain climbed by a whopping 11.2% in April this year - that is the biggest monthly recorded increase since records began back in 1998.Due to this increase in goods export, the country's trade deficit fell to a lower level than was predicted for April. This is good news too as it has also been revealed that the UK high street, as well as the manufacturing business sector, have both seen healthy figures reported. Business analysts are now saying the the UK economy has steadied since January, despite the announcement of the EU referendum.While the growth in exports from the UK mainly came from other EU countries, there was also a small rise in sales from countries outside of the EU. Compared with last year, UK exports have increased by 10.3% inside Europe, and 1.9% outside of Europe.Despite the rise in exports to the EU, during April alone our exports to the rest of the world saw a rise of £1.3bn to a new record level of £14bn. That is not bad at all when compared with a £900m rise in exports to the EU.According to the figures from the Office for National Statistics, the trade deficit in goods fell to £10.5bn from a downwardly revised £10.6bn in March. Our increased exports to the EU comes after a general rise in economic growth in other member states, and in the face of previously fast growing economies such as South Africa, Russia and Brazil falling into recession.Despite the heightened uncertainty of the European Referendum, the figures give a lot of hope to exporters and the rise in industrial production in April, along with good retail sales growth, has certainly helped them to achieve decent levels of export rates.

The BCC Has stated the UK economy to grow in the next year. The following was posted here in January 2015:The British Chambers of Commerce (BCC) is stating the UK`s economy is set to strengthen in the coming year. Looking at important indicators coming from over 8,000 businesses it shows that the factors are higher than the crisis in 2007. Specifically manufacturing sectors, showing orders and employment are at all time highs. John Longworth, director general of the BCC said: "It is a fantastic to start the New Year with a very positive quarterly survey. Firms across the board believe they can create jobs, invest, and export." It is especially pleasing that the spurt in manufacturing has proven not to be a fluke. But businesses have major ambitions, and to be able to meet them, more support must be provided," he said. The findings predict the UK economy to grow by 0.9% in the fourth quarter. The BCC has also said that they expert higher full-year growth in 2014.This is excellent news for UK business and shows the conservative recovery might just be working after all.

Updated June 2016:

The UK economy is predicted to continue to grow strongly during 2016 despite the global slowdown, according to a recent report by EY. With the continued growth in house prices, increasing demand for exports from the UK and a rise in the average household budget, financiers are now predicting this will boost Britain's economy and UK businesses further during the remaining months of 2016, according to research published earlier this year. Top London economists estimate that Britain's economy will grow by an average of 2.6% this year, compared with just 2.2% during 2015, despite a disappointing start to the year from global markets. With the rise in the new national living wage to £7.20 per hour, householders have an increased disposable income, and with a combination of low interest rates and low inflation, economists are seeing a boost in consumer spending resulting in a forecast growth of 2.8% over last year. The report by EY also predicted that house prices would rise by an average of 6.5% this year, but on the downside the levels of new house building is still set to fall short of what is needed to satisfy demand.

In a separate survey conducted by the Confederation of British Industry and accountancy firm PwC, showed nearly 50% of financial services companies reporting an increase in their business in the latter quarter of 2015 and into early 2016, with activity expected to continue to increase over the rest of this year, according to 30% of companies surveyed. It is clear that London remains to be one of the most desirable cities in the world to conduct business. Even if you don't have a London address for your own business, you can still benefit from the prestige of having your office listed here. Take a look at our Virtual Office Packages to see how our services can help you build credibility and good standing for your business.