UK Property Market News

UK Property Market Claims Signs of Recovery

Over the second part of 2009, the property market, which has been at a virtual standstill since last year has been reporting positive signs of recovery. However, the question remains; is this simply a ´Bear Bounce´ or a real recovery?

With virtually all market indices reporting upward gains for house prices and mortgage lending returning, albeit from a historically low base, it would be easy to suggest the UK property market has reached a bottom.

We honestly believe the ´bigger picture´ suggests no real recovery in sight.........

Look at the overall UK and Global economy and the picture is far less certain. Unemployment is rising, even if some of the numbers are being hidden, and insolvences increasing, plus GDP is down, with forecasts being quickly revised down as much as 5%. The MPC and even the Government now regularly admitting they under-estimated the severity of the downturn and numbers/forecasts they produce are now viewed with less confidence.

As we have always said, UK property market is a lag indicator and property values are still too high.  

Negative Equity Home Owners Top One Million!

That dreaded term ´Negative Equity´ re-entered the common vocabulary last year as the number of homeowners estimated to have mortgage debt larger than the value of their home officially hit 900,000, however, the Council of Mortgage Lenders now estimate the number has shot up, possibly to as much as 1.2 million.

Worst still, they suggest that number could double as over a million are within 10% of negative Equity, meaning that possibly 2.4million will be there by 2010. Many prognosticators are suggesting the downward spiral will continue next year and that can only mean the number will increase. During the 90´s slump approximately 1.5 million homes were in negative equity.

The UK economy is clearly effecting how the population consider their own situations. The BoE report UK mortgage holders repaid over £8billion of debt in the final 3 months of 2008. The largest amount since 1970. Corporate borrowing has remained fairly flat, indicating companies are likely paying down debt, rather than investing.

Mortgage lenders Increases, But Only Just...

 See Mortgage Page

Dec 09 - MPC of the BoE  held Base Lending rate at historic low of 0.5%. But how long can it remain so low? Could the increase in LIBOR rates be an indicator of where they go from here?

See Base Rate Page

See House Price Index Page

Repossessions up in 2008 and 2009

The latest Council of Mortgage Lenders figures for the first 3 months of 2009 show 12,800 homes repossessed.

Total repossessions hit 40,000 last year (About 88% of CML predicted 45,000) but an increase of around 70% over 2007. The Buy-2-Let market made up around 11% of repossessions, whilst B2L lending fell 56%. (Oyster: Fairly positive numbers in our humble opinion.) In May the CML reported mortgage lending down again to just £10.4billion, approximately 60% down from last year.

On the other hand, the CML report a 4% increase in Mortgage approvals in February. But before we get carried away, it´s a relatively small increase for February, when many more house-hunters traditionally hit the market and a long way down on numbers 2 years ago.

The FSA report 46,750 properties were repossessed in 2008, an increase of 68%.

It´s Grim Up North (ern Rock.)

Things were looking grim for Nationalised Mortgage lender Northern Rock last winter as mortgages in arrears skyrocket and repossessions increased. In December, 1 in 6 Northern Rock mortgages were in arrears and it expected to account for 1 in 10 repossessions in the UK. However, 3 months on and the picture has remained steady, with overall arrears falling slightly while 3 month arrears increased to 1 in 30.

OK the numbers are still grim, however, they haven´t worsened. We understand there will be repossessions, and defaults, hardly news, but it appears lower interest rates are having an effect by allowing others to remain up to date. Northern Rock also posted Gross Mortgage Lending of £550million for Q1. Which is slightly better than expected.

More Mortgage Market

Inside Trick Part 2...

Fool me once, shame on you, Fool me twice...??

Buy-2-Let scam artists Inside Track are back to fleece their public once more..... READ

The Year Ahead for UK Property Values

A recent study of Britains top economists for the Financial Times suggests almost two thirds believe 2009 will be gloomy and property values will continue to fall. See who says what for the UK market on UK Predictions

Previous Articles:With the BoE continued lowInterest rates, will this mean more lending next in 2009? Read More

At Last, Bank Admits Responsibility

In an unprecedented move, Barclays Bank Group CEO John Varley admitted in an interview that the Banks were partly to blame for the current financial crisis. He went on to say UK house prices will continue to fall, with 15% already gone and another 15% by end of 2009...... (Note January 2010: Whilst we believe John Varley is a man who knows his stuff, how did he get it soo wrong....again!)

Read 2009 Predictions

The Worst is Yet to Come?

Possibly the best indicator of the future house prices can be found on the Derivatives Trading market, where professional investors bet on the future of house prices...... Read More

See Property Market Predictions for 2009 HERE