Property News Blog

House price growth could be wiped out by year end

August 5, 2010

With the constant barrage of house price reports it’s hard to keep track of exactly what is happening throughout the UK, but if the latest one is anything to go by, prices now look set to fall.

New sellers have dropped asking prices in July for the first time this year, as properties continue to flood the market, which means the gains made in the first half of 2010 could be wiped out by the end of the year.

The average asking price of a home in England and Wales has risen by 7% since January, peaking at £237,767 in June, according to property website Rightmove.com.

Rightmove the property website reported that an average of 30,000 new homes are currently being put up for sale each week, 45% more than during July last year.

The average number of properties that estate agents have on their books has risen for the fifth month in a row, the highest level since August 2008. As a result, there are now five new properties on the market for every two potential buyers who have a mortgage approved.

While the flurry of activity makes for a potentially strong buyers market in the second half of 2010, it’s not complete doom for sellers when the research figures are put in context.

While average asking prices fell in some regions: by 2.3% in East Anglia and 2.1% in Greater London, asking prices have risen for July in other areas. The South West, Wales, West Midlands and East Midlands all saw a rise, with the South West leading the way with a rise of 2.8%.

So, while it’s not the news many homeowners may have been hoping for, it’s simply proof that there’s still a long way to go before any price rises can be considered a stable sign of recovery.

UK House prices fall!

July 30, 2010

UK house prices fell back in July, for the first time since February, as buyer demand remained weak.
According to Nationwide, the average value of a home declined by 0.5%, to £169,347, taking the annual rate of inflation down to 6.6%, compared with 8.7% in June.
The lender notes that the sizeable drop is due in part to the strength of house price gains in July of last year.
Demand from homebuyers remained subdued, attributes this to a combination of restrictive credit conditions and nervousness on the part of potential first-time buyers and home movers, who are uncertain about the future economic outlook.
At the same time, the imbalance between supply and demand has been easing since the abolition of Home Information Packs in May, putting further downward pressure on prices.
It will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store!

Tougher rules to come on Mortgages

July 26, 2010

It’s just too easy to get a mortgage nowadays. All you need is a 10% or 15% deposit, and a brilliantly well-paying job, and you can borrow all you need – as long as you don’t need very much. For the average couple, unless you have £25,000 in the bank, you can say to buying your first home.

There were fewer than 50,000 mortgages approved in May. Everyone else was simply resigned to renting until they are old and grey. But the FSA disagrees, it wants to make it even harder to get a mortgage – putting even more hurdles in he way of hopeful buyers.

The proposal is to run affordability checks on every borrower, in an effort to ensure ‘responsible lending’.

All mortgages should be affordable, and it’s in everyone’s best interests to make sure that the buyer doesn’t suddenly find themselves running up arrears because they failed to budget carefully enough.

If you have an impaired credit history – and after a decade of irresponsible lending followed by a period of massive tightening, an increasing number of people do – then the affordability test will be even tougher, and require a buffer between your incomings and outgoings.

The second part of the proposals is to effectively outlaw self-certification mortgages and require proof of income from an independent source.

This is based on research that shows almost 50% of mortgages taken out in the last three years have been granted without proof of income.

If you have a normal job, the new rule shouldn’t make much difference to you. You just produce the pay slip as you always have. If, for any reason, your income is less reliable – if you are freelance or self-employed, or you work on commission, you’re in much more trouble. In effect you need to have this work for at last a couple of years before you can even think of getting a mortgage. Even then, it’s unlikely your first couple of years was massively profitable, so you can wave goodbye to a mortgage for the best part of half a decade.

If you work for yourself it’s amazing how poorly you are treated. They say freelance work is less reliable than a job, you can get fired at a moment’s notice, but even in a normal job you only get one months notice. And if you get your work from a handful of employers, there’s an argument you’re more secure, because they’d all have to dump you together for your income to be as risky as a full time employee.

Further house price falls predicted

July 13, 2010

More bad new for the housing market as Property professionals are predicting further house price falls following a surge in the number of homes being put up for sale, research indicates.
The Royal Institution of Chartered Surveyors (RICS) said that in June, 4% more of its members expected prices to fall during the coming months than those who thought they would rise.
The number of potential buyers registering with chartered surveyor estate agents fell for only the second time since the latter part of 2008, as consumers fretted about the state of the economy.
The easing in the mismatch between supply and demand, which was one of the key factors supporting the housing market recovery in 2009, has already led to a fall in the proportion of surveyors reporting price rises.
The group said surveyors were still reporting house price rises in most parts of the country, but the increase in the supply of homes for sale was pushing many of the regional balances towards negative territory, with the exception of London and Scotland.
More surveyors are already reporting price falls than those who are reporting rises in Wales, Yorkshire and Humberside, the West Midlands and Northern Ireland.

Many fail to get help for debt problems

July 12, 2010

According to a debt charity in the UK many people are struggling with unmanageable debts and are failing to get any help to aid them in managing their debt problems. In fact, it is estimated that around one million people may be struggling with debt that they do not seek advice about.

Officials are concerned that as a result of many of those in debt failing to get the advice that they need the level of personal insolvencies in the UK could increase sharply, as more and more people suddenly find themselves unable to keep on top of financial commitments..

The level of insolvencies in the UK is already very high, and officials from Credit Action believe that this could be just the tip of the iceberg. However, the charity also said that around half a million people with debt were seeking help to assist them with managing their finances, and this included seeking help from debt charities and organisations such as the Citizen’s Advice Bureau.

There are concerns that many people may also be turning to high interest borrowing such as high rate credit cards and doorstep loans in order to get them through financially, which in reality could leave them in an even worse situation. Further data from a study carried out indicated that 11% of adults spend more than they earn each month, which is likely to contribute to high debt levels.
Many people try to bury their heads in the sand & try to ignore their current financial situation, avoiding the issues & thinking their problems will go away. This is not the case, seriously think about solving your problems, it may be the case that you will have to move house or sell to release some cash or to get a cheaper one, renting may also be an option.
If this is you, please don’t just sit there, take action or seek advice as soon as possible.

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