The Housing Market in 2008 - 10 latest facts
November, 12, 2008
How much will your property be worth at the end of the current financial crisis? Will it be the early 90’s all over again, or are we looking at something completely different?
These latest housing market facts are for anyone who owns a home, hopes to buy, needs to move or faces having the prospect, in the months to come, of having to secure a remortgage deal. So don’t worry about scouring the web for the latest news, SaveBorrowSpend brings you the latest news in 10 housing facts.
1. Selling your home? Unless you have a multi-million pound property or live in a particularly desirable location, houses are taking months to shift. So plan ahead. The number of homes sold has fallen to a 30-year low in the past three months according the Royal Institution of Chartered Surveyors (Rics).
2. Sellers in London - Each estate agency in the capital sold, on average, just 6.4 homes in the past 3 months. Rics say sales in the North-East of England faired better with an average of 16 transactions per agency in the last quarter.
Compare popular mortgages
3. New Mortgages - The Council of Mortgage Lenders say the number of loans for house purchases fell by 15% in September compared with August. This figure is nearly 60% lower than in September 2007. The key is simply the lack of mortgages available. Despite multi-billion pound bailouts by the Government lenders are still reluctant to lend, and the criteria you need to meet is tighter than before.
4. Benefiting from rate cuts - You may be wishing you had a standard variable rate, as many of the big lenders have passed on the full 1.5% Bank of England rate cut. Don’t get too smug if you have a SVR many of us are on fixed rates and don’t want to know!
5. Tracker Mortgages - 3 of Britain’s biggest mortgage lenders have just re-launched their tracker mortgages (after rapidly pulling them last week). But they have failed to pass on the 1.5% cut. Abbey and Lloyds TSB have actually increased the margins on their two-year tracker deals. Figures show more people are opting for tracker mortgages despite the Bank of England revealing that tracker rates last month soared to their highest level in more than 7 years.
See how much you could save on your energy costs with ScottishPower
6. Stamp Duty benefits - The temporary rise in the stamp duty threshold has meant more than half of homebuyers avoided stamp duty in September. In a rare bit of good news. This is significantly higher than 22% a year ago.
7. How much less is your home worth right now? Most experts agree house prices have fallen on average 12% to 15% in the past year. There are, of course, regional variations and if you bought in a desirable area your house will retain its value for longer. The up and coming areas are the first to fall.
8. Will house prices keep falling? If you property was worth £400,000 in October 2007 expect it to be worth about £300,000 at the end of the housing crisis. Nationwide says house prices will continue to fall in 2009/10, the lenders Chief Executive Graham Beale has predicted house prices could fall 25% from their peak last year. This is echoed by Nick Bate, UK Economist at Merrill Lynch who also predicts a total fall of 25%. Chief Economist at Halifax Martin Ellis is slightly less pessimistic forecasting a 20% drop in prices.
Do you need to remortgage in the next 6 months? Get a quote and advice from an FSA authorised advisor
9. Negative Equity - If house prices lose a quarter of their value 2.5 million homeowners could face negative equity.
10. First Time Buyers - Falling house prices should be a good thing for people trying to get on the property ladder, very much like the mid-1990’s. If they continue to fall experts are predicting a recovery in the first time buyers market. Fingers crossed, the lenders will eventually make getting a mortgage easier.
SaveBorrowSpend Philippa Adam
