Archive for June, 2009

Recent statistics reveal that house prices in London saw a modest upturn in May

The average price for a home was up 0.3% last month, equating to an increase of £3,500, research from primelocation showed. Year on year sales are down slightly from May 2008, down 2.4%. London prices remain relatively high, as demand is still great in the country’s capital, regardless of the lack of available credit. Once the banks’ credit lines have been relaxed and credit becomes available again to borrowers, expect to see the floodgates opening up and prices shooting upwards. Many expect the beginning of 2010 to be a very distinct turning point.

Many now see the last 6 months of increasing prices as an turn in the market, and the beginning of a gradual upturn. Prices in the capital remain high compared to almost all other cities in the U.K., which remain downbeat after the recent real estate downturn. During the peak of the market bubble, most U.K. cities enjoyed extrordinary pricing valuations. London and Edinburgh are two of the few cities which still remain out of reach for most first time buyers, with demand for new homes still strong.

Home Sales Demand

There has been reports for muc stronger demand in the lower end of the market in London, as low interest rates and increasing yields on cheaper housing becomes apparent.  In certain areas of in-demand central london, sellers may even have the upper hand.
Cash rich investors are expected to make a return to the market, as many feel that the market may have bottoms out, with many investors unwilling to miss out on the returning London market. Prices have taken only a very slight dip in recent months.

The top-end of the market has seen some very modest decreases in value, but the mega-rich have been far from the poverty line. Most have simply sat on the sidelines, watching the inevitable unfold - and many are now in a better postion than before the crash. Whilst the first time buyer remains very much out of the loop in the london market, bargains abound for the well off. With many amatuer landlords crumbling under the mistakes they had made during the boom years, more experienced landlords are now moving in to pick up the housing sale bargains. Top end rental properties have increased their value by 115% this year, as the well-healed remain unfazed by the recent crash.

House Price Expense

First time buyers are still in a most unenviable position, where a 2 bed flat in central London will cost anything around the £300,000 mark. This effectively means that a young couple looking to buy in the capital would require a healthy £75,000 income between them. On top of a deposit upwards of £10,000. Oh, and dont forget stamp duty of around £8,000, and any other expenses you care to think of. London, depsite recentdecreases in property prices, is still a pricey place to settle down.

Rental values for mid range properties in London remain down for the 14 consecutive month, recent studies reveal. To search local rental values in your town, click here: http://www.sell-my-house-quick.com/search/index/minrental/1

The Council of Mortgage Lenders (CML) has given further boost to the UK optimists
hopes of a property revival, today reporting that its members have granted 16% more home
loans in April, than were allocate in March. The news arrives as a welcome fillip to a market
uncreasingly uncertain about its future.

The CML, who’s members account for 98 of 100 home loans granted in the UK, said 35, 600 loans were granted in April. This is still 28% behind last years april statistics.

The 16% increase in mortgage approvals were for customers moving from home to home, rather than first time buyers, which gives us an indication of the facts underneath the figures. First time buyers are generally regarded as a market indicator in terms of an upturn in the market.  When these increae, it augurs well for an increase in house prices. There was a 13% increae in home loans to first time buyers in the March - April period, signifying a subtle but important potential trend development.

The new statistics also provide an insight into the load-to-value ratios lenders are agreeing to lend at. Last year, the median loan to value rate was 72%, now this year its 67%. Lenders hve also radically reduced their lending terms, which have now come down to 2.63 times a borrower’s income - this time last year, the banks were lending an average of 2.97 - almost 3 times the income.

Historically low

Whilst the new figures do signal a significant upturn in the amount of mortgages being granted, historically, they remain far from the highs of recent years. This april’s 35,600 loans still reflect ah housing market struggling to find a market bottom, and investors remain on the sidelines waiting it out. In the last seven years, the market average for home loans in April was 88,000. There are also signs that many borrowers are switching from there flexible mortgages to fixed rate products, with interest rates at a low. The fixed rate loan applications have risen to levels not seen since july last year. Short term fixed rate loans are now far more appealing that long term variable rates.

These tentative signs can signal a base to start a housing market reform, but have a long way to go to represent a housing market recovery.

First Time Buyers

RICS (The Royal Institue of Chartered Surveyors) Reported that buying enquiries increased in may for the seventh month in a row in the U.K,  and economists reporting that with house prices falling and interest rates dropping , there would inevitably be more activity in buying in the U.K. Lending criteria remains tight, inhibiting first time buyers from entering the market, who also have to incorporate stamp duty in their initial purchase, adding more cost to a purchase which many find out of reach. A further drop on house prices of 10% would not be unreasonable to expect over the next 12 months.

Most economic commentators are agreeing that the market remains extremely volatile and the next few months could produce highs and lows. Growing unemployment, low wage growth and a public unwiling to take a chance on house prices, continue to place heavy downward pressure on the houseing market in the U.K.  There will invevitably in a very slow, steady recovery, based in the amount of first time buyers entering the market, which remains at a low.

On a global outlook, today the Chief of the IMF, (International Monetary Fund) chief Dominique Strauss-Kahn has suggested that ”The large part of the worst is not yet behind us.” Whilst many commentators in the U.S and the U.K. remain upbeat regarding the worldwide and home economies, there are many factors to be taken into account,  with the U.S. providing a forecast for europe as to which way the global housing market may turn next.

For housing price comparibles in your area, click this link: http://www.sell-my-house-quick.com/search

Australian home prices have dropped again, according to the latest data from the Australian Bureau of Statistics. With exception of Darwin and Adelaide, in the December quarter, house prices fell a relativelt small 0.8%, in all capital cities across the country. House prices in Australia have remained relatively robust, when compared to the catastrophic collapse in the United States and the U.K in the last 12 months. Compared to the rest of the global economy, Australia appears to be weathering the economic storm with a quietly upbeat outlook. Across the country, there are a variety of different stories regarding house prices and movement, with Melbourne reporting the biggest drop of 1.7%, down on the previous quarter. Bribane’s housing market appears to have cooled a little, with the average house price dropping 1.2%. Sydney’s has faired well, with a slight drop of 0.3%. Conversely, Darwin’s prives have remained optimistic, and demand there remains high, with an increase of 1.6% over the same period.

Whilst prices have dipped slightly over the last few months, Australians are upbeat about the next quarter, and are aware that the falls in the median price have been generally very modest. The mood remains positive.

It was back in 1996 that house prices in the capital cities across Australia fell. The fall over the last year was only 3%, a meagre amount those sustained in in Europe and the U.S., which have had to bear 10 -20% losses and upwards, especially in hard-hit areas in the U.S, like Florida and California. It illustrates the fundamental difference in the economies around the globe.

It all adds up to a heady cocktail for Australian investors. A good time buy? It looks very much that way. With the First Home Owner Grant available, and interest rates low, it would look like the ideal time for first time buyers to step onto the ladder. We’re expecting a significant upturn in the Australian market in 2009! Search for australian homes here: http://www.sell-my-house-quick.com/search

With interest rates at the lowest level for years, and are expected to drop further, revivals in Australian home buying are expected.

RealtyTrack.com, a foreclosure specialist in the U.S, stated that despite foreclosure rates declining from the record breaking mark of april, foreclosures continue at an alarming rate in the U.S. The obama administrations attempts at reducing troubled debts and helping distressed owners, continues to make small progress in the wave of floclosures sweeping the american property landscape.

May is now the 3rd highest on record for foreclosures - there have been nearly 1 million foreclosures in a 3 month period this year - an unprecedented amount.

There were temporary freezes on foreclosures during march - in an attempt to help struggling homeowners gain some reprieve - these have now been released back into the maketplace, and may start to add to the ominous figures.

The current figures tell us that around 1 in 400 houses in the U.S are receiving default notices of some type - and the foreclosure figures are relevant to the economic recovery; until they are reduced, house prices can’t recover, which can’t recover until foreclosures are reduced…a confounding picture that is one of the great troubles of the current administration.

REO’s (real estate owned) are bad debts that banks and lenders have on their books (and don’t want them) are set to increase in the coming months.

The government plans will take time to be implemented, as prices continue to drop.

In a typical year, there are around 800,000 foreclosure in the U.S - experts predict that this year there will be over 4 million across tha states. Two factors are in play now: the amount of unsold inventory, and the downward pressure on prices - all leading to an increase in foreclosure activity. States which had reaped the benfits of large scale increases in property, are now the worst affeceted areas. Nevada comes top of the list, with one in 64 houses in foreclosure. California, Florida and Arizona, are 3rd 4th and fifth respectively.

If you need to advertise or sell your property, click  on this link, to be taken to our log in page. http://www.sell-my-house-quick.com/user/register. If you are in need to sell your house quickly for whatever reason, you can advertise your property as a ‘Discounted Property’, where you can state the value of your home (usually aquired through a certified valuer) and what value you are willing to. For example, if your house is valued at $200,000, on your listing page, you can check the ‘are you negotiable?’ tab, and enter how much you are willing to negotiate on the sale of the property. See our FAQ page for more details.