House Price Stability
30th June 2009
After deciding to watch the last few minutes of the tennis which turned into an enthralling hour or so and a hot sleepless night punctuated by a restless little boy crying, I dragged myself out of bed before 6 am to the hallowed halls of the BBC to do a live TV interview on house prices.
Although the usual nerves kicked in, I enjoyed it even if being interviewed standing up was new! Actually, standing up was a good way of doing it and Simon Jack is a very good interviewer who keeps things flowing and certainly knows his stuff.
I was on to talk about the latest Nationwide House Price stats that show prices have increased for the third month running albeit by only a small amount. Whilst this is of course welcome, I don’t think it is time to crack open the champagne just yet.
Reading too much into these figures is a dangerous game as the amount of transactions are still very low. This means that even a small change represents a bigger percentage, but where I believe these figures are reassuring is that it seems that we have finally entered into a period of stability. We may bump along the bottom for a while, a small jump here and a small fall there, but the worst is undoubtedly behind us.
Bank of England stats out yesterday also showed that slowly but surely, the number of new home loans being approved is creeping upwards, reflecting the growing confidence in the UK property market.
Some people were expecting better figures but let’s not kid ourselves, it’s still very difficult to secure mortgage finance at higher LTVs. Once again, I am concerned that the number of remortgages has fallen. Fixed rates are rising and anyone settling for short term gain on a lender’s SVR could be in for some long-term pain.
The availability of mortgage finance and the lack of funds that lenders have to lend still represents a massive barrier and no full blown recovery can happen until this is rectified and liquidity returns.
However, I still believe this year is the year to buy and in the more sought after areas of the country the bottom has probably been and gone, although supply of decent properties in a period where demand is still good obviously has an effect, as does the traditional seasonal “Spring Bounce”.
Once more stock hits the market we may see a slight easing off of prices again, as well as over the quieter Summer months, but I believe it will be only slight, as once this happens the pent up demand, again especially in some areas, will keep prices at least level.
This is Bow, he’s a plucky little Boston Terrier and knows a thing about mortgage applications. His owner, Patrick, is one of our clients and Bow here helps with his paperwork. If there’s anything you need to know about mortgage applications or the paperwork entailed then check out our advice hub – it has everything you need!View the mortgage guides
Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.