Blanchard Consultancy – the independent construction consultant

Confidence and credit have deserted the housing market. The Monetary Policy Committee will be hoping that the lowest borrowing rates for 53 years will help residential property prices to recover from one of their steepest challenges since the Second World War.

However, according to estate agents and consultants out in the field across the UK, the depths of the slump in parts of the market is worse than the research from the various lenders and property websites suggests.

At an auction organised by Allsop last Monday, a flat in an upmarket area of Leeds that was bought for £400,000 in July 2007 sold for just £159,000. A reduction of 60pc. At the same auction a flat in the city centre of nearby Wakefield, bought for £189,000 on October 31 2007, sold for just £69,000. They were not the only bargains on offer. The auction was originally planned to run for two days but was extended to four because of the number of repossessions.

Article continues at Telegraph online

Labels: House prices survey, uk mortgage market

House prices are going to rise again. That may seem a scenario far removed from today's headlines about falling prices and haemorrhaging values. But, according to an influential economics consultancy, prices have to go up for one simple reason - government targets for the minimum number of new homes are just not being met.

A year ago, 'targets' were the order of the day. Gordon Brown announced that in England alone there should be between 240,000 and 297,700 homes built annually until 2016, and that, in total, between 2.9 million and 3.5 million new homes should be built by 2020. In 2007 - before the downturn hit the new-build market - some 174,900 homes were completed: still below target but on an upward path from previous years.

Yet at the start of autumn 2008, figures for housing starts suggest that this year's total will be only about 110,000, according to the House Builders Association. It predicts 2009 and 2010 figures may well fall to a dismal 55,000. The consequence is that the new-homes industry is imploding. The fewer homes built, the fewer people work in the industry, making the downturn even worse. Similar targets, and shortfalls, exist in Scotland, Wales and Northern Ireland.

Read the full article at Guardian online

Labels: House market, House prices survey

A leading group of property workers has called on the Government to kick start the housing market, as new figures showed that people selling their houses are being forced to cut almost 10 per cent off the asking price to secure a sale.

The Royal Institution of Chartered Surveyors (RICS), said that the Government’s attempts to drag the housing market out of the doldrums have been “limited”, and has made a number of suggestions to kick start activity.

The Government is tomorrow expected to announce a series of new measures to help struggling homeowners and first-time buyers.

Proposals are forecast to include improved support for people facing repossession and shared equity schemes for those trying to get on the property ladder.

Read more at Times Construction news

Labels: falling house prices, House market, House prices survey, Housing Minister, property prices, property trends, RCIS, uk housing

Homeowners have started to drop their asking prices as the reality of the downturn in the housing market hits home, a report out today shows.

The property website Rightmove said the average house price fell 1.2% to £239,564 in June, from £242,500 in May, and further reductions would be required to sell homes where there was an oversupply. It suggested what buyers could afford would continue to deteriorate because of rising living costs and higher mortgage rates due to the credit crunch.

Miles Shipside, commercial director of Rightmove, said: "For most sellers that will mean whatever they thought of asking for their property at the peak of the boom, they need to take at least 10% off. Otherwise their property will stagnate.

"In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking record prices. It was a mad state of affairs that defied the laws of economics. Thankfully, new sellers are now taking some proactive steps to price more realistically from the outset to attract increasingly hard-pressed buyers."

The biggest drop in house prices was in the south-east, where they dropped 2.4% to £303,828 in June. In the south-west they decreased 2.2% to an average £258,696. Prices fell 1.6% to £225,565 in East Anglia and 1.4% to £399,010 in Greater London.

Although asking prices rose in the north, the West Midlands and Wales, these areas have seen some of the steepest price falls in previous months, with average asking prices 3% lower in the West Midlands than they were a year ago, and 2.6% lower in Wales.

The lack of buyers is widely blamed on tighter mortgage lending conditions.
The Council of Mortgage Lenders said that lending almost halved during the first quarter of 2008, resulting in 142,300 mortgages.

Halifax, Britain's biggest mortgage lender, announced last week that it would raise its fixed rates on loans by half a percentage point - the 20th time it has changed its rates since the start of the year.

Homeowners who have more than 25% equity in their houses face an increase on a two-year fixed-rate mortgage from 6.49% to 6.99%. On a £150,000 home loan, this adds £47 a month to repayments.

The increase follows similar moves from several rivals in the past week, including First Direct, which raised what had been the cheapest fixed rate on the market.

The number of properties for sale in the UK now outweighs the number of buyers by over six to one. There are 25% more properties on the market than six months ago, which means that 1 million sellers are competing for just 150,000 buyers.

Average unsold stock per agency branch rose to a record 75 homes, up from 73 the previous month.

Rightmove used the asking prices of up to 200,000 properties for its figures.

Read more at Guardian Money

Labels: House market, House prices survey, property prices, Residential property, Rightmove

Owners of poorly maintained homes or those in scruffy neighbourhoods must slash their prices by as much a fifth if they want to find a buyer. But, despite the downturn, grander properties in most upscale locations are still selling for more their original asking price, according to research from Savills conducted for The Times.

The only exception to this ‘the best sells, the rest sticks’ trend, is those properties between £1 million to £2 million in London’s smartest postcodes, favoured by City executives.

Job losses in the Square Mile and Canary Wharf mean that any owner who needs to move quickly must accept a price at least 6 per cent lower than at the height of the boom in 2007.

Simon Edwards of Savills, Hampstead said: “A year ago you could put a house on the market for £1 million and sell it for £1.05 million. Now it would probably make £950,000. That £100,000 difference effectively means a 10 per fall in prices.”

‘Blighted’ homes, those that are unmodernised, or in lower grade locations in all parts of England are changing hands at prices 6 per cent to 20 per cent lower than a year ago.

This would suggest that the market has fallen more sharply than the major property prices indices indicate. Halifax figures out yesterday reported a 3.8 per cent since May 2007.

However, some sectors are relatively immune, with what Savills terms ‘best in class’ homes in all price brackets still buoyant. If you want to dispose of a £2 million-plus property in the Midlands or the North, you should find a ready buyer and expect to pocket more cash than a year ago.

Original article here.

Labels: House market, House prices survey, property prices, Savills

More people want house prices to fall than to rise, BBC research has found.

That is the surprise finding of the first poll to test the assumption that house price falls are unpopular and therefore politically damaging.

Barely a fifth of people want house prices to rise - fewer than the number of people who want them to fall.

The poll of 1,005 people, commissioned by the BBC, found that only 22% said they wanted prices to go up while 28% said they wanted house prices to fall.

The poll, carried out by ICM, canvassed people over a three-day period from 25 to 27 April.

'Crashproof'

Nearly half of the people who responded, or 46%, said they wanted them to stay the same. The findings cast doubt on whether the political and economic damage done by falling prices is as serious as has been feared.

The poll was commissioned after makers of the BBC2 TV series The Truth About Property came across a surprisingly large number of people who wanted house prices to drop.

The first part of the series investigates the extent to which Britain's homeowners are "crashproof" - meaning they could withstand or even benefit from price falls.

What people in Cambridge think about house prices
Price falls bring economic benefits not just to first-time buyers but to any homeowner who wants to trade up to a larger or more valuable property.

The price of the place they are selling may fall. But, all else being equal, the more valuable property they want to buy will fall by a larger amount - meaning they have to borrow less to "climb" the property ladder.

Confidence knocked?

Economists are concerned that if prices fall too quickly it may knock consumer confidence, already at its lowest for 15 years, leading to reduced spending that could worsen the current economic slowdown.

But another finding for the programme questions whether it is house price falls that have damaged consumer confidence - as opposed to other factors such as food, fuel and mortgage payments.

Respondents were asked if a fall in house prices of more than 10% would make them more likely to cut back on household spending such as clothes, leisure and groceries.

More than 60% of people said it would either make no difference or would make them likely to spend more.

Only a minority - 38% - said it would make them more likely to cut back.

Nearly a third of homeowners have no mortgage on their homes - meaning no risk of negative equity.

And the programme reveals to what extent house prices would have to fall to put the average borrower in negative equity.

The Truth About Property is broadcast on Monday, 12 May and Tuesday, 13 May at 2000 on BBC Two.

For more info see the original BBC article.

Labels: Andrew Verity, House market, House prices survey, ICM, The Truth about Property