Business World

There has been much lot and gloom about the housing market in the news but with it there are also opportunities for some buyers and sellers. Here we round up the latest news on the protection market and look at whether it is yet a time to buy.

According to the Land Registry, house prices in January were down by 15.1% since the same all at once last year. Every region in England and Wales has seen property prices fall by at least 12% in the last year. Buyers are waiting until they see that the bazaar has bottomed out, and with the waiting, house prices are expected to continue falling for the next few months. There are however signs that the freefall may be easing and presently may have reached the bottom.

For example, with prices in prime spots in London being down up to 20% compared to the March 2008 tiptop coupled with the weak pound, buyers from overseas are seeking to pick up a bargain. The window of a strong euro against the bludgeon and the security of bricks and mortar in prime location adds further appeal. Although Londoners themselves may object to property being snapped up it will be one measly prop to help stabilize house prices. Importantly, according to TimesOnline, cash sales, which are not recorded in the statistics produced by Nationwide or by Halifax, now account for a prodigious 40 per cent of transactions as buyers turn to property as a more lucrative alternative to low-paying deposit accounts.

Mortgage availability is creation to see change. In January, mortgage approvals held steady at 31,000. Although this is half of what it was last year, they have averaged 31,000 for the last six months. Mortgage lenders typically scarcity a deposit of 20% of the purchase price which is a hefty sum to secure. Saving for a deposit takes time and in this metre house prices fall. However, Northern Rock will soon begin to offer some 90% mortgages. The Bank of England is expected to reduce base rates again and is also likely to increase the amount of money in the British economy, both of which will improve the supply of funds for mortgages.

The present-day low interest rates, although will not lead to a sudden housing market revival, do make loans more affordable which will be another positive assistance for both new and existing borrowers. According to Halifax, mortgage payments have fallen from 31% of gross earnings for a new borrower in the first half of 2008 to an estimated 21% in January 2009. The residence price to average earnings ratio has decreased to an estimated 4.48 in December 2008 from a peak of 5.84 in July 2007; a succumb to of 23%. The long-term average is 4.0. Potential buyers are noticing the opportunity: according to the Queenlike Institution for Chartered Surveyors enquiries from new buyers rose in January 2009 for the third successive month.

Of passage, there continues to be pressure on incomes with rising unemployment and the negative impact of the turbulent financial markets on the availability of mortgage assets, but the update is that there are signs that the freefall on house prices and drought of mortgage availability is easing. As such, it could be wise to buy before edifice prices reach bottom as with low prices, low interest rates and increased mortgage availability an eventual recovering economy could down a bear house prices to rebound sharply.

With the UK property market ending 2008 showing significant falls in both prices and number of sales attention has turned to the prospects for the coming year. Opinion is divided on what we can expect for 2009. Some property experts predict that the market will stabilize or even begin to recover whilst others less optimistically expect things will continue to decline further. For anyone involved in UK property from home owners to estate agents and mortgage lenders the future prospects of the housing market is clearly of great importance.

In a recent survey major UK estate agents and lenders were asked to make predictions for property sales and valuations in 2009. The bad news for home owners is that there is little hope that house prices will recover over the next twelve months. On average it is expected that property values will drop a further 10-15 percent this year. None of the property experts questioned predicted a general increase in prices. For number of property sales predictions were a little more optimistic. Whilst some experts estimate that the number of house sales will fall others more confidently predict that sales will increase by as much as 10 percent.

The above predictions represent the UK housing market as a whole. Of course the market is much more complex and diverse than this. Although the overall picture may not be great there are some sectors and locations where significant signs of recovery are expected. For example there is some confidence that the property market in London will ‘bottom out’ in 2009 and begin to recover by the end of the year.

Similarly it is hoped that the number of first time buyers in the market will increase. The rising property prices of the last decade have left many first time buyers unable to afford to get a foothold on the property market. With prices now falling and a high number of people waiting to buy it is predicted that this sector of the housing market will contribute to a large part of sales in 2009.

Overall although house prices and sales may not increase this year the general consensus from property experts is that 2009 will see the market stabilising. This stabilisation should then pave the way for a housing market recovery in 2010.

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