House Prices Fall at Record Low
April 25, 2008
Thanks for visiting! If you're new here, you may want to subscribe to our RSS feed. .
This site posts daily property development tips and news on a wide variety of subjects ranging from DIY to mortgages, from property finance to industry news.
Go ahead, subscribe to our feed! You can also receive updates from this blog via email
Thanks for visiting!
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%
Top 10 Most Expensive Areas in the UK for Council Tax
April 24, 2008
CIPFA the Statistical Information Service has released a report listing the top 10 most expensive areas in the UK for Council Tax
Here are the results:
Sedgefield Borough Council, Labour, £1,613.10
Rutland County Council, Conservative, £1,606.38
South Bedfordshire DC, Conservative, £1,593.51
Newark & Sherwood District Council, Conservative, £1,591.81
Easington District Council, Labour, £1,586.71
Royal Borough of Kingston-upon-Thames, Liberal Democrats, £1,580.08
Weymouth & Portland Borough Council, No Overall Control, £1,567.77
Hartlepool Borough Council, Labour, £1,565.48
Mansfield District Council, Independent, £1,546.38
LB Richmond upon Thames, Liberal Democrats, £1,543.76
Popularity: 60%
Mortgage Approvals Decreased in March
April 23, 2008
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%
Bank of England Makes Radical Lending Move
April 21, 2008
The Bank of England today announced a radical new plan to help ease the credit crunch by loaning Banks £50 billion.
It announced it would allow banks to trade mortgage-backed bonds, whose deal has become problematic, for specially-issued Treasury bills. This would result in the freeing up of banks’ balance sheets, making it possible for them to lend mortgages to more to households challenged by rapidly diminishing mortgage options and property values.
The swaps are available only for assets existing at the end of 2007, and new loaning cannot be faciliatated by them.
Banks have applauded the Bank of England’s “innovative and unequaled policy response”, and are surefooted that the move will enable them to lend mortgages to more to consumers and home buyers.
Chancellor Alistair Darling has declared that this move is necessary to keep more damage to the United Kingdom economy occuring as a result of the credit crisis, and will provide more details of the plan to MPs in the House of Commons subsequently this week.
BoE Governor, Meryn King, was quoted by Reuters as saying: “The Bank of England’s scheme will lift confidence in financial markets while ensuring that the stake of losses on the loans they have made remains with the banks.”
Popularity: 48%
House Prices for First-Time Buyers in London Rise by 250%
April 17, 2008
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%
Latest Property Headlines
- Present your conservatory correctly
- DIY increases during credit crunch
- Save energy when you develop a property
- The CML Proposed New Measures to Prevent Home Repossessions
- Overseas Property Investors Being Fined Under New Spanish Legislation
- Housing Associations Practicing Unfair Posseassions Says CAB
- Mortgage Advisors
- Gross Mortgage Lending Improved in April
- Bank of Scontland to Review Buy to Let and Self Cert Mortgages
- Less Buyers and Sold Properties Says National Homebuyers