UK NEWS
NEW HOPE FOR HOUSING MARKET AS BUYERS ENJOY BEST DEALS IN YEARS
VALUE FOR MONEY: Now is the time to buy
By Sarah O'Grady
PROPERTY is now good value for money for the first time in years, a report says today.
First-time buyers frozen out of the market by soaring prices and families desperate to move home can now climb back on the housing ladder.
Homes have become significantly less expensive in recent months since last year’s peak in values, according to the Lombard Street Research Housing Affordability Index.
The average home is now worth £229,691, down 4.9 per cent over the last year, according to housing website Rightmove.
But economists dismissed predictions of a 30 to 40 per cent price crash and said the drop would be 20 per cent at the most before a recoverery late next year.
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Prices have fallen enough to prick people’s interest.
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Nicholas Leeming, Propertyfinder.com
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Peter Rollings, managing director of estate agent Marsh & Parsons, said: “This is the most affordable housing market we’ve seen in years. People are beginning to see value and will pile back into the market.
“Prices in many cases are now down to the level they were in early 2006. That means there are lots of opportunities for people to trade up.”
Nicholas Leeming, director of propertyfinder.com, said: “Prices have fallen enough to prick people’s interest.
“Many are biding their time but the best investments are always made by those who are brave while others are afraid. Clever buyers can now get real, long-term value from the market.”
In more good news for home owners, a freeze in mortgage lending could be thawing as interest rates between banks fall back. Three-month interbank borrowing costs – used in pricing mortgages – dropped to 6.12 per cent yesterday, down from 6.16 per cent on Friday.
Economist Philip Shaw, of Investec, said this latest fall suggested banks were finally becoming more willing to lend to each other again.
“It’s encouraging that we are beginning to see banks re-entering the inter-bank market. There has been a distinct trend where offers of cash are coming back on the table,” he said.
Ross Bowen, from agents Connells S&V, said: “Buyers hold the cards at the moment and sellers are very flexible on asking prices. After months of inactivity there is huge pent-up demand to move and, with interest rates firmly on the downward path, mortgages are finally going to get cheaper too.”
Mortgage lending slumped to its lowest level in more than three years during September, the Council of Mortgage Lenders said yesterday.
A total of £17.7billion was advanced, 10 per cent less than the previous month and 42 per cent down on September last year. It was also the lowest since January 2005 and the weakest figure for September since 2001.
CML director general Michael Coogan said: “The mortgage market is open for business. But weakening consumer demand and ongoing funding constraints will dampen monthly lending figures for the rest of this year and into the first quarter of 2009.”
He said total lending for this year would be about £255billion, down from £363billion in 2007 and the lowest since 2002.
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A number of mortgage lenders, including the Nationwide and Abbey, have blamed high inter-bank rates for not passing interest rate cuts on to borrowers.
The Bank of England last week overhauled its money-market operations to allow banks more access to funds. The Government is also pumping £37billion into three banks and guaranteeing £250billion in wholesale lending.
OF COURSE....
21.10.08, 1:02pm
the parasitic estate agents would say that wouldn't they. Anything to increase their obcene commissions for doing f all. All they are doing is talking bo**ocks
As for the average price, for a mortgage of 3.5 times salary you would have to be earning £65,626 per annum. Yeah, unless you are an estate agent, councillor or M.P., you stand no chance.
Lets see more of these wide boy estate agents go to the wall, have a good clear out, and get those who are left to take qualifications, including the M.D.'s
A HOUSE IS ONLY WORTH WHAT SOMEBODY IS PREPARED TO PAY FOR IT
• Posted by: KarlH • Report Comment
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