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Less Buyers and Sold Properties Says National Homebuyers

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Figures from the National Association of Estate Agents (NAEA) show that FTBs’ market share fell from 11.7 per cent in February to just 8.3 per cent in March.

In addition, the number of properties sold also slipped from eight sales per agent in February to just seven per agent last month.

It is bad news for homeowners and may lead to a surge in people seeking a fast property sale as reduced demand means prices are likely to fall further.

“The global credit crunch, squeeze on mortgage approvals and the media cloud that currently surrounds the property market are undoubtedly having effect on individual’s decisions to buy or sell,” said Stewart Lilly, president of the NAEA.

“There are indications that first time buyers have dropped their market share once again showing a ‘wait and see’ attitude has been adopted,” he added.

Fast property sale expert Julian King adds, “Lack of buyers means that the homeowner who needs a sale with find the price of their property drops from the already lowered amount they were expecting.

“Homeowners looking to sell their property even within a reasonnable timescale will have difficulties unless they drop their price.

“People facing financial difficulties will find themselves staring repossession in the face very quickly as the lenders turn up the heat in order to protect themselves”.

Mr King is a director of National Homebuyers the UK’s leading fast house buying firm that guarantees to make an offer to purchase any property in the UK quickly regardless of its condition or location. The company also specialises in providing Sell and Rent Back solutions for homeowners who want to release equity in their property but remain living in their home.

Popularity: 54%

House Prices Fall at Record Low

The latest housing market survey from the Royal Institution of Chartered Surveyors (RICS) shows that house prices fell to an all-time historical low in March, as the effects of the global credit crisis continue to have a damaging impact on the UK property market. The survey showed that 78.5% more chartered surveyors reported a fall than a rise in house prices (an increase from 65.7% in February), which surpasses the previous lowest figure of 64.5% in June 1990 and is the lowest figure since the survey began in 1978.

On a regional basis, the picture looks even worse, with 89% of chartered surveyors in the East Midlands reporting a fall in house prices and 86% in East Anglia. Scotland continues to be the only region in the UK where surveyors reported a net rise (of 4%) in house prices.

With the sharp cut-backs in the availability of mortgages and the lack of borrowing options caused by the credit crisis, it is clear that the fall in prices is being driven by the inability faced by many to secure the necessary financing for a house purchase, rather than an influx of supply.

The fall in demand continued – for the sixteenth consecutive month and at the fastest rate since March 2003 – with 49% more chartered surveyors reporting a fall than a rise in new buyer enquiries. And it is not expected that this situation will improve in the near future, as the official interest rate cuts are not being passed on to the high street and consumers struggle to obtain financing.

On the supply side, surveyors also reported a decline in new instructions to sell property, with the ratio of sales compared to the stock of unsold property falling to 24.8%, the lowest figure in twelve years.

Furthermore, the expectations for any rise in both sales and prices also fell, with the balance of surveyors expecting prices to rise being at an all-time low of -73%, and sales expectations also in negative numbers.

Commenting on the RICS survey, Lawrence Smith of Decision Homebuyers said that “Prospective sellers remain in an indefinite holding pattern as long as demand remains low and house prices continue to fall.”

News provided by Decision Homebuyers

Popularity: 57%

Mortgage Approvals Decreased in March

March 2008 has been an extremely bleak month for mortgage lending with mortgage approvals declining considerably, according to the latest data from the British Bankers Association.

The major mortgage lenders reported that March has been the lowest month for all forms of mortgage approvals since September 2000. House purchase approvals were the lowest since September 1997. However remortgaging approvals represented 50 per cent of all mortgage approvals.

David Hooks, the BBA statistics director said:

The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals.

Pressures on personal finances are also constraining demand, not only for mortgages, but also for personal loans and borrowing on cards.

Popularity: 67%

House Prices for First-Time Buyers in London Rise by 250%

New research has showed that house prices for first time London buyers have soared by over 250 per cent in the last ten years. Today the average cost of first time buyer properties is nearly £260,000.

Home buyers getting on the property ladder paid an average of £159,494 for a property in 2007, a staggering 300% jump compared with about £52,674 in 1997.

Nevertheless the average income of a UK family only increased by 53 per cent over the past ten years.

The result is a generation of young people are being locked out of the housing market.

Adam Sampson, chief executive for the housing charity Shelter said:

These new figures show in full the true and worsening situation first-time buyers find themselves in.

Every year the gulf between what first-time buyers can afford and the cost of housing is widening.

Despite falling house prices, many lenders are increasing their mortgage rates, making an already desperate situation worse.

Shelter’s research found that the average first-time buyer home cost 3.4 times average earnings at the end of last year, double the ratio of 1.72 in 1997.

The average monthly mortgage repayment has also soared by 172% from £304.80 to £827.87, taking up 21% of the average working household’s income, compared with just 12% a decade earlier.

Not only are first-time buyers facing higher property and mortgage costs but lenders are also demanding increasingly large deposits.

Popularity: 51%

Fixed Rate Mortgages Decline

Tracker rate mortgages have been extremely popular in February, according to the Council of Mortgage Lenders borrowers selecting fixed rate mortgage deals decreased to 52 per cent, in fact the lowest since March 2005. In the other hand tracker rate mortgage acquisitions increased to 35 per cent, from 33 per cent in January. The CML reported that floating rate mortgages are becoming ever more appealing compared with fixed rate mortgages due to the current financial instability.

However the amount of deposit home buyers put down hasn’t changed significantly. In February first time buyers typically borrowed 88 per cent of the property’s value, unchanged from January, and 3.33 times their income, compared with 3.32 in January. Home movers typically borrowed 71 per cent of the property’s value, up from 70 per cent in January, and 2.97 times their income, unchanged from January.

Michael Coogan, the CML director general said:

The trend away from fixed rate mortgages continues as expectations of further Bank base rate reductions, probably starting this week, have increased.

The February figures relate to completions of transactions started several months ago. More recently, there has been consistent evidence of tightening in lending criteria which will lead to shrinking pipelines of new business as the recent Bank of England’s credit condition survey made clear. We expect this process of further tightening in lending criteria to continue in the second quarter as lenders respond to the challenging market conditions.

Individual lenders are having to balance consumer demand with service considerations, as many of those active in the market are seeing higher levels of applications than they can deal with in the wake of the overall tightening in supply of funding to the market.

While lower short-term interest rates help a little, we continue to urge the Bank of England to use more broad-based and flexible measures to increase liquidity levels in the UK market so that firms have sufficient funding available to match consumer borrowing demand in 2008.

Popularity: 33%

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