Sterling gets a much-needed boost after good news in the housing market

| April 15, 2009 | 0 Comments

Sterling rose to its highest level against the US dollar today in three months after the Royal Institution of Chartered Surveyors (Rics) announced that housing market activity is picking up after new enquiries increased for the fifth month in a row.

At one point, sterling reached as high as $1.5037 and also hit a six-week high against the euro to 1.1372.

As the severity of the UK’s recession emerged earlier this year, sterling experienced lows not seen since the mid-1980s and was close to the $1.35 mark.

Today, however, the good news from Rics gave sterling a boost after the Institute said interest from potential buyers is starting to gain “real momentum” as new buyer enquiries are growing at their fastest pace since September 2003.

Consequently, surveyors are less gloomy about the price outlook for the coming months.

However, Rics highlights that the market is still tough for first-time buyers since mortgage finance is still hard to come by without a hefty deposit. According to the Council of Mortgage Lenders (CML), first-time buyers needed a deposit of 25% in February.

In related news, yesterday the CML reported a 4% rise in mortgage approvals for house purchases in February.

Lee Ferridge, a currency strategist at State Street, told the Reuters news agency that “people are seeing tentative signs of green shoots in the UK housing market.”

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