Figures provided to the BBC by the Council of Mortgage Lenders show that 23,000 homebuyers took out 100% mortgages in the 12 months to March this year. With house prices as measured by HBOS (Halifax) back to the level of January last year, this means that many if not most of those who took out 100% mortgages since then will now be in negative equity.
The Guardian yesterday reported that traders were pricing in a 50% drop in house prices over the next four years. Firstly and personally, I think prices may fall quite deeply. But I don’t think they will drop by 50% in “real” terms, unless the economy takes a pretty freaky turn for the worse. Then all bets are off. I’ll come to why a 50% drop in “real” house prices is unlikely later, but first (and I seek help here if…
The May survey from the property body RICS once again points to house price falls – not deep, but widely spread. But the real threat claim its economists is from a freezing up of the market. Official figures point to a drop of about a quarter in the level of transactions in the first four months of this year compared with the average last year. But the RICS survey suggests that the level of sales is set to drop further….
On the face of it things look fairly steady in construction land. Thanks to a strong showing from publicly-funded work and a timely rise in private non-housing repair and maintenance, construction output remained steady in the first quarter of 2008, despite falls in private housing and commercial work. It is no surprise that private housing work dropped more than 5% over the quarter and stands about 15% below its peak last year. Some of the slack is being taken up…
The average house prices has been falling by £4,000 monthly over the past three months as the pace of decline in the market has accelerated, according to HBOS figures. In May house prices were down 2.4%. So, if you had your house valued at £199,600 last August (the peak reached by Halifax’s standard average house price) there’s a fair chance your net worth has fallen by £15,489. And if falls continue at the same rate until the end of this…
The Government’s confidence booster of “we’ll be okay look at our strong labour market” is now starting to look rather shaky. The last pillar of hope for those keen to stop a collapse in house prices was strong employment. That prop appears to be wobbling. They say that the last thing companies want to do is shed staff, well it would appear that is now happening apace. After releasing its gloomiest ever construction report the buyers body CIPS has now…
The buyers body CIPS registered the fastest monthly fall in construction activity since it began surveying the industry in 1997. The figure for activity in the housing market was pitifully low. The survey of purchasers sets “no change” at 50, below that is decline, above increase. Well at 43.9 in May compared with 46.1 in April and 47.2 in March, the clear message from this survey is that the industry is sinking towards recession at an increasing pace. Housing activity…
Figures from the cost information service BCIS point to an inflation-led threat to the housing repair and maintenance market, as prices rise 20% over two years. Energy inflation, skills shortage and rocketing global materials prices are combining to pump up inflation just at a time when may households are considering staying put and doing up their homes rather than trading up. But with households increasingly squeezed for cash, the chances are that price hikes of this magnitude will lead to…
More desparate news for house building as the evaporation of homebuyers in the UK housing market is further underlined with the release of the Bank of England figures showing mortgages approvals for house purchases in April diving to a new low. Just 58,000 loans were approved to homebuyers, half the figure a year ago and down on the March figure of 63,000, which itself was well below the previous lowest figure recorded by the Bank in its data series going…
The release today by Nationwide of figures showing house prices dropped by 2.5% in May will come like a kick in the teeth to house builders and estate agents. It is the last thing they want to hear given the fragility of the market. A drop of two grand or so in the average price of a house in a month is a lot to swallow and will put of plenty of would be buyers. But the big question that…