After a year and half of depressing statistics, tentative signs show some positive news returning to the housing market.
Hometrack, which studies estate agents found House prices fell by only 0.6% in March, the slowest monthly decline for a year.
The Association of Residential Letting Agents said that the number of landlords looking to buy properties has risen from 3 % to 8%. At the same time the number of landlords looking to sell properties fell from 7% to 4%
The lower house prices are encouraging people to look for good value properties.
Also, the record low interest rates are encouraging homeowners to ‘overpay’ their mortgage and repay their loans. Britons repaid a net figure of £425 million in march. This suggests that people are becoming risk averse in the recession and attempting to save and repay debt. The repayment of debt will boost bank and building society funds.
Also, according to propertyfinder.com consumer confidence is starting to improve. The % of people who expect house prices to rise has risen from 25% in Dec to 38% in March.
Finally, the Bank of England stated mortgage lending showed a 19% rise in the month of February 2009. However, this was from a very low base. Mortgage lending in February 2009 was £1,214 million, compared to £3,861 million in February 2008.
Problems Ahead
Despite positive signs, the overall activity in the housing market still remains very subdued. Housing transactions are near record lows and with the economic recession likely to persist for most of 2009, there are still many factors pushing house prices lower. Also, the slowdown in house price falls doesn’t mean we are necessarily coming to an end of house price falls. The rate of house price decreases is often volatile.
At the same time, the worst case scenarios of house prices falling another 50% seem increasingly unlikely – especially given long term demographic trends towards larger number of households.
- Housing recovery – Independent
Thanks for your insights into the UK housing market. We are experiencing much the same falls here in Australia. The governments recent first home owners grants have helped to keep the market from becoming much further depressed. Hopefully things can only go up from here.