R e a d i – M o v e . c o m

The number of mortgages approved has more than doubled during the past year as the property market continues to recover, figures showed today.

A total of 60,518 loans for people buying a new home were in the pipeline during November, the highest level since March 2008 and more than double the record low of 27,162 seen in November of that year.

Net lending, which strips out redemptions and repayments, also increased for the third month in a row to stand at £1.46 billion, a level last seen in February, according to the Bank of England.

Britain’s beleaguered factory bosses were also given a lift today after a survey reported the sector’s best month for two years during December.

The Chartered Institute of Purchasing & Supply’s (CIPS) headline activity index – where a score over 50 registers growth – reached 54.1, up from 51.8 in November and much better than the 52 forecast by City economists.

The average reading for the fourth quarter of 2009 was also the highest since the end of 2007, fuelling hopes that the UK exited recession in the period.

The improvement in mortgage lending has been driven by increased activity on the housing front, as recent price rises tempt both buyers and sellers back to the market.

Hetal Mehta, senior economic adviser to the Ernst & Young ITEM Club, said: ‘An acceleration in mortgage approvals and higher mortgage lending bodes well for housing market prospects, but it is unlikely to be sufficient to sustain the rapid price increases seen over the second half of 2009.

‘Supply pressures are likely to abate as the price increases encourage more people to put their properties on the market, and with unemployment continuing to rise, demand will remain weak.’

But unsecured lending contracted for the fifth month in a row as consumers continued to focus on paying down their debts.

People repaid £376m more of unsecured debt than they borrowed during November, slightly down on October’s net repayment of £591m, but nearly double the level seen during the past six months.

The Bank of England also reported that the number of people remortgaging remained broadly unchanged during November at 24,897, although this was still down on the recent six-month average of just over 29,000 as homeowners continued to sit tight.

Meanwhile, figures from the Building Societies Association showed that mortgage lending by mutuals contracted for the 11th month in a row during November.

Building society mortgage customers repaid £543m more than they borrowed during the month.

The sector also suffered on the savings front, with customers withdrawing £775 million more than they deposited, the ninth consecutive month this has happened.

Adrian Coles, director general of the BSA, warned that mortgage lending was likely to remain ‘relatively depressed’ during 2010 until funding conditions for lenders improved further and more homes came on to the market.

On savings, he said building societies and other deposit takers continued to face heightened competition from institutions with a Government guarantee, which was distorting the savings market.

House prices rose by 5.9 per cent in 2009 as the UK property market bounced back from last year’s double digit declines.

The average cost of a UK home rose by another 0.4 per cent in December to £162,103, marking the eighth consecutive month of price increases, according to Nationwide Building Society.

The performance in 2009 is a surprise turnaround on the hefty 15.9 per cent price plunge in 2008 and comes despite the worst recession in the UK since World War Two.

Market on the mend: The average cost of a home rose by 0.4 per cent in December to £162,103, marking the eighth consecutive month of price increases

Today’s figures see the past decade end on a high note for the UK property sector which had been hammered last year by the credit crunch and the banking crisis.

And Nationwide said the past decade was the strongest on record for British house prices in spite of the woes of 2008.

Ten-year figures show property values rose by 117 per cent since the end of 1999. Even with inflation taken into account, the average home increased by 68 per cent in value compared with a 14 per cent fall in real terms in the 1990s.

Martin Gahbauer, Nationwide’s chief economist, said the increase in house prices this year ‘surprised most commentators’.

He added: ‘Few could have foreseen this development at the start of the year, when the near term price trend was still pointing to a repeat of the double digit annual decline experienced in 2008.

‘Although house prices are still 12.2 per cent lower than their October 2007 cyclical peak, they have now rebounded by an impressive 8.9 per cent since their February 2009 trough.’  

But the picture for 2010 is unclear, with a recent slowdown in price rises raising concerns over the sustainability of the market recovery.

December’s 0.4 per cent rise is significantly below the hikes of up to 1.4 per cent recorded in the summer.

Three month on three month growth rates – generally considered to be a smoother indicator of the underlying trend – also eased during December to 2.1 per cent from 2.8 per cent in November.

The past year was buoyed by ‘pent-up demand’ as cash buyers not restrained by the credit drought entered the market, Nationwide said.

Record low interest rates, a smaller-than-feared increase in unemployment together with recent stabilisation in the banking sector and signs of an economic recovery also acted as a boost.

While interest rates are expected to remain low well into 2010, there is uncertainty over the labour market and whether cash buyers can continue to support housing demand.

Mr Gahbauer said: ‘This year’s recovery has to some extent been driven by transitory factors and there are reasons to believe that it will lose momentum over the coming year.

‘At the same time, there is no obvious catalyst on the near-term horizon that would trigger significant renewed falls in prices.

‘At this stage, therefore, it seems likely that 2010 will see no significant house price movements in either direction.’

The group’s figures show that London saw the strongest growth throughout 2009, with the average home in the capital now costing £276,088 – seven per cent more than it did a year ago.

Northern Ireland was the worst performing region, with prices falling 6.7 per cent to £137,949.

Carlisle in Cumbria was the best performing of all the UK towns and cities in 2009, with prices soaring by ten per cent to £136,666.

Leicester suffered opposite fortunes, with home prices down nine per cent to £141,643.

Over the past decade, Wales notched up the biggest rise in house values, with an 82 per cent hike in real terms, after inflation.

England saw the weakest growth in the noughties after prices increased by 65 per cent, said Nationwide.

With a new album on the horizon and a baby clamped to her side, the last thing singer Sophie Ellis-Bextor needed this year was a major property renovation project.

But that’s exactly what she has faced – and conquered – in an action-packed 2009.

‘It sounds like a stressful combination of things to be doing at the same time, but that is how I have always lived my life,’ says the star.

After selling their threebedroom Victorian townhouse off Ladbroke Grove in London’s trendy Notting Hill in September for a reported £1.3 million, Sophie and her Feeling guitarist husband Richard Jones, bought a dilapidated five-bedroom Victorian Arts and Crafts style property in Turnham Green near Chiswick in West London.

‘Parts of the house were pretty much a shell,’ says Sophie. ‘When we first visited there were no floorboards – it was hard-hat territory.

‘The previous owner had been there for 60 years and just lived downstairs so there was no central heating and only sporadic electrics.

‘So that has all been gutted and updated and a rear exterior outhouse has been replaced with a modern extension, but I can’t take credit for the building work as a contractor was already involved when we exchanged.’

Inside, however, Sophie – who is appearing in a celebrity online video advent calendar in support of Great Ormond Street Hospital this year (www.merrychristmas.co.uk) – has been more hands on.

‘I love Fifties fashion and bright colours – the TV show Mad Men was a big influence. There is a dark navy room, powder blues and greens and lots of rich Fifties shades,’ says Sophie, right, whose big hit was Murder On The Dancefloor.

‘There is a fine line between creating something that’s stimulating and something that looks like a children’s TV set, but hopefully we’ve pulled that off.

‘We are just relieved that it is finished before Christmas.’

Spread the news: Jude Law has moved into a converted church in New York

JUDE LAW IS ON THE MOVE IN MANHATTAN

Serial womaniser Jude Law, above, has moved into a converted church in New York’s Greenwich village while he plays Shakespeare’s Hamlet on Broadway.

The three-bedroom penthouse is worth £4.2 million and comes complete with vaulted ceilings and glass stairs, but is just a short-term rental for Law who still lives in the five-bedroom townhouse he bought in Maida Vale, North London, for £3.5million last year.

The church has been divided into five units and he is not the only celebrity in the block – other tenants include Sopranos actor Stephen Van Zandt and Marks & Spencer underwear model Noemie Lenoir.

A BEACH BALL FOR DAVID WALLIAM

Comedian David Walliams has had his offer accepted for a £1.85 million four-bedroom detached house in the celebrity hangout of Western Esplanade – at the end of Hove promenade.

His immediate neighbours in the road will include Norman Cook and Zoe Ball, Heather Mills, actor Nick Berry, TV presenter Susan Stranks and astrologer June Penn.

The three-storey detached turreted property forms part of the terrace built at the beginning of the 20th Century with each house having its own private beach, perfect for Walliams, 38, who famously swam the English Channel for charity in 2006.

WILL JIM DAVIDSON SEE THE FUNNY SIDE?

Comic Jim Davidson may not be smiling when he finds out how much his old house is worth.

Jim had a torrid time trying to sell Pinkhurst Farm in the heart of the stockbroker belt in 2004. He put it on the market for £4million but accepted £2.5million in 2006, which barely cleared his £2.2 million mortgage.

Kicking himself:  Jim Davidson’s former home, Pinkhurst Farm was sold for £2.5m in 2006, and is now worth £12m

Now, after a turbulent time for the property market, the six-bedroom 16th Century house, right, on the Okewood Hills Estate near Guildford is back on the market through Hamptons (01483 572864) – for £12 million.

Sitting in 21 acres, with a guest cottage, pool and paddocks, the property has had a £5million facelift, including a gravel drive that cost £280,000.

Since selling, Davidson, 55, moved to sunnier climes where prices are heading in a different direction – Dubai.