Reducing the credit risk on mortgage lending

After six years of virtual stagnation in house building and house purchasing, the market is now leaping back to life.

The reasons are pretty clear. Over the past nine months, we have been getting compelling evidence on the economic recovery story. First-half growth data was surprisingly strong, but subsequent data has been telling the same story.

From the perspective of house purchasing, there is probably nothing more important than what is happening in the labour market, and here the news is very strong. We know from the Quarterly National Household Survey that employment increased by more than 31,000 in the year to the end of June, but this week we got live register figures showing that, during September, a further 4,700 people left the live register and it has now declined by 38,620 over the past year. While the live register is not intended as a measure of unemployment, it does provide a good health check on what is happening in the labour market.