Blanchard Consultancy – the independent construction consultant

Homeowners will have to wait a decade before property prices return to 2007 levels, a leading estate agent said yesterday.

Average house prices are tumbling at a rate of £78 a day and are set to fall in total by 16 per cent this year and 11 per cent by the end of 2009, according to a forecast from Savills. This will bring the average value down from £182,080 in December 2007 to £136,123.

The London-based agent does not expect the market to show signs of recovery for another two years, with a full rebound to 2007 levels not likely until at least 2018.

It cautioned that only buyers with adequate cash will be able to take advantage of cheaper prices in the meantime, because of the lack of availability of mortgage deals.

Read more at Times online

Labels: Housing market, property prices, UK recession, uk repossesions

Banks are seeing an increase in the numbers of homeowners deciding voluntarily to hand back their properties because they cannot afford to keep up mortgage payments.

Voluntary repossessions involve the bank selling the property at auction but this will not show up in official figures as a repossession because there has been no court order.

The phenomenon is widespread in the US, where it has been nicknamed jingle mail because homeowners often post their keys to lenders if they cannot make the payments and no longer have any equity in their homes. It was also common in the UK recession of the early 1990s when homeowners were in negative equity.

Article continues at Financial Times Online

Labels: credit crunch, uk mortgage market, uk repossesions

A debt charity yesterday called on the Treasury to put pressure on Northern Rock to change its approach to repossessing properties.

Credit Action said that the nationalised bank was twice as likely as other lenders to repossess a home if borrowers fell behind with their mortgage repayments. Chris Tapp, director of the charity, said its eagerness to repay the government meant it was treating struggling customers harshly.

More than 19,000 homes were repossessed in the first half of this year, 4,000 of which were seized by Northern Rock.

The bank's chairman, Ron Sandler, said: "I would deny strenuously that we have been overly aggressive."

Since it was nationalised in February, Northern Rock has cut 1,500 jobs and reduced its lending to help repay the government. In the nine months to September 30 it had repaid £15.4bn of the £26bn it owes. However, the bank's mortgage arrears figures jumped by nearly 60% in the past three months.

Read more at Guardian Online

Labels: northern rock, uk mortgage market, uk repossesions