According to an article in Reuters UK last week, Hometrack have reported that March’s annual prices show a fall that is the biggest ever in England and Wales. Overall house prices are a record 10.3 percent lower than they were a year ago.

This could be slightly misleading though because this shows the fall over the whole year, it is worth noting that the pace of the fall in March was the slowest it has been for 10 months. Still it gives us a perspective on the year in house marketing.

Hometrack further reports that the average selling price for houses in March was £156 000 which was 0.6 percent lower than February and represents the lowest monthly fall since May 2008. They do say, however, that this slow in the rate prices are dropping could be mainly down to seasonal factors.

“With the expectation of continued increases in unemployment and weak economic growth together with restricted availability of mortgages, it seems doubtful whether the increase in activity and sales will continue to gather momentum in the coming months,” said Richard Donnell, Hometrack’s director of research.

“Prices look set to remain under downward pressure over the rest of 2009,” he added.
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Daniel Thomas of the Financial Times reported last week that things may be on the up and up in the buy to let sector.

His source for this heartening claim is the Association of Residential Letting Agents (ARLA). They have indicated that for the first time in over two years landlords appear to be buying more properties than they are selling.

As there is never any good news without the bad at the moment you will not be surprised to hear that ARLA’s quarterly survey also showed that some landlords were struggling to meet mortgage payments as house prices continued to fall.

Still the fact that people are starting to buy again is at least cheerful news. ARLA contribute this increase to the fact that landlords in a position to are snapping up houses that have fallen to a bargain low price.

Ian Potter, operations manager of ARLA, said: “The data shows that there are bargains to be had in the property market at the moment for those with a keen eye.”

So, as we have said before, despite all the doom and gloom there are still people out their with money who are willing to take a risk.

Last week in The Guardian Patrick Collinson wrote an interesting article on how this country is going to avoid a house price explosion of the type that many believe lead to our current financial situation.

His article was quite critical of the Labour Government in that he says two years ago they thought it was a great idea ‘for households to buy over-priced houses by borrowing loans equal to five or even six times’ joint income.’ He also questions the intelligence of 100% buy to let mortgages and buy to let lending financed through global wholesale markets.

He maintains that Britain and America’s attitude to lending was responsible for this financial crisis we find ourselves in, I would suggest that they were not on their own, in fact virtually every well off country on the planet did the same thing, but I guess he is largely right. So what does he suggest is the way to proof ourselves against this sort of disaster in the future?

Basically, don’t trust the banks to run the country’s finances. He states that after 12 years labour have finally worked that out. Lord Turner has made a number of suggestions for government regulation of the finance industry and most of them do seem sensible.

Collinson points out that these are not new ideas and that countries such as Germany and Hong Kong have had these policies for years.  He also sounds this warning Continue reading →

In among all the doom and gloom that is being thrown around at the moment there are a few people stating that they see the very early indicators of a recovery. This is such cheerful news that I thought I would give you my potted understanding of how that recovery is going to look. According to the experts it comes in four stages.

Stage One: At this point the mortgage sector is still constrained but investment is beginning to be encouraged. You usually start to see some people investing, the cash rich because there are bargains out there and foreign investors attracted by a drop in the value of the pound.

Stage Two: This is likely to be the longest stage and can be mistaken for stagnation. Anybody who is heavily reliant on credit is still excluded from the market and prices are likely to be static. Those who are equity rich though will be starting to become quite active.
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