The Housing Market

A combination of exceptionally low interest rates and plummeting values has made house prices more affordable now than they have been in years. Figures from Halifax showed that UK house prices fell over 17% in the year to February 2009. Falling house prices have helped to nurture a tentative recovery in interest from buyers. The Royal Institute of Chartered Surveyors (RICS) reported that the number of potential buyers registering with estate agents has increased, with London reaching levels not seen since October 2006. Nevertheless, cautious mortgage lenders are still managing to derail the hopes of first-time buyers by insisting on high deposits, and the ongoing shortage of mortgage lending, combined with the effects of the recession and the rising threat of unemployment, is likely to hamper demand. The RICS has complained that, “The lengthy process of obtaining mortgage finance, even for those with large deposits, is contributing towards the blockage in the marketplace.” In addition, falling prices and concerns about negative equity have discouraged many prospective sellers from putting their home up for sale. RICS recently announced that UK house sales fell to their lowest level for over 30 years (since 1978), commenting, “Mortgage finance is still a problem and people are worried about job security because of the recession.” If you would like to review your mortgage options please call Mark or Clare at GMP Independent Financial Advisers LLP