House Price Spy Blog

Scotland, which had previously resisted the UK downturn, is set for its first average fall in property prices announced by lenders Nationwide and Halifax from their mortgages figures.

For an example, there are 50% more properties for sale in Edinburgh which has driven prices down by 10%. Many properties are now fixed price, while ‘offers over’ properties are only fetching 10% over asking price. This is of course after the boom in Edinburgh property prices after the completition of the Scottish Parliamant in 2000, causing prices in many areas to double or treble.

House prices in Scotland had previously risen while south of the border prices stagnated and dropped month on month by a few percentage points.

The Single Home Reports Scheme which was introduced only north of the border, has seen the expenses of sellers rise and made more sellers think twice about moving.

Location and age of property should be taken into account more than ever when considering buying property, houses in ever popular areas is still a great investment while you may need to re-consider holiday homes, new build flats with inflated price tags etc

The recent slump in house prices has caused a reduction in new home being built to a record low of 110,000 across the country planned for 2008. In the medium term this will cause more demand on existing housing leading to a bounce back in property prices.

Buyers with a imperative to move, first time buyers plus property professionals will all raise the demand for housing in the UK in the year to come.

With supply not meeeting demand it is only a matter of time untill prices start growing strongly again in the UK.

The average property price in the UK is £210,00 down just £1,740 on the previous month. Spain, the fourth largest economy in the EU, has an even greater problem the prospective construction of holiday homes has led supply to exceed demand and the property market fell by 7.1% during last month alone! Spanish inerest rates have risen by 11.1% in the last year.

One point that I think needs to be made regarding the current financial situation, is that Chancellor Alistair Darling based his budget 2008 figures on certain revenue from Stamp Duty which will now be down by 15% at least. This means he will have to fund this shortfall from somewhere else. The Northern Rock debacle has caused a chain of events which has resulted in the taxpayer bailing out a major lender and now will have to find billions of pounds from somewhere else to compensate for the lack of consumer confidence in the property market.

The total loss to the UK public will be of the order of £5BN!!!!

This drop in prices will last for around 4 years and take up to 20% in total off the average property price. Gordon Brown has a lot of thinking to do if he wants to win the next election, Tony Blair won voters confidence in the economy anf brown will be judged on ho he deals with a mess he helped create!!!

As with all property slumps there will be some areas worse hit than others, inflated prices in the capital seeing modest flats changing hands for millions, will hit London property prices hardest. The HBOS predicted that prices in London will fall by a massive 9%, the lender is planning a rights issue in the months to come, hoping to raise £4 billion to counteract falling sales of mortgage plans.

London was of course hardest hit in the 1980s when inflated prices caused negative equity for many.

The Council Of Mortgage Lenders last year predicted a 1% increase in average property prices and are now predicting a 7% drop in prices. Conservative estimates predict a 5-10% drop with the higest estimates reaching 20% for extreme cases!

Some thing to think on is that although property prices are on average 4% down on 2007 they are in fact 5% up on 2006 which, I think puts things in perspective! Prices are not rising as high as they were but have reached a ceiling where steady rises will apply.

The average property price is a huge 39% higher than in 2003, which tells its own tale!!! You could also consider the fact that if you buck the trend and move homne you will be losing a one end (selling) and gaining at another end (buying cheaper) so overall wont lose out too much…

The SBE (Society of Business Economists) has predicted that UK property prices will fall by up to 10% during 2008 and reach rock bottom in 2009 losing up to 20% of their value. They did however predict that prices would then get back to peak values seen in 2007 and start rising from that point onwards. However this may take up to 4 years….

UK estate agents saw an all time low of sales during May 2008.

With no end in sight to the Credit Crunch there will be no quick ‘ Bounce Back’ effect and people appear to be waiting out the situation rather than bucking the trend.

The Bank Of England has lowered and retained the mortgage rate in recent months at 5%, while this has not been passed onto the borrower by all lenders. This does not seem to have a very beneficient effect on the Uk housing market

This may be the time to either reduce the price of your home or indeed to wait out the next period and see what happens in the UK property market.

Energy bills are rising higher than ever and it’s never too late to switch you utilities provider and save hundreds of pounds each year! The press is full of scare stories about families choosing between heating and eating, but most of us will have noticed out bills rising in the last year with the remaining low cost providers following suit and raising prices.

House Price Spy has a specialist Utilities section with the best providers and price comparision sites around. Dont say you cant be bothered or they are all the same as many promise to beat your present deal at the very least! There is not paperwork to complete and no visits to your home will be required to make the change.

Try our Cheaper utility Bills section, it could be the best thing you do all day!

The Bank Of England has held the mortgage lending rate for June 2008 at 5%, holding for a second successive month. The BOE has slowely decreased the rate from a peak of 5.75% in August 2007.

Whether this will increase consumer confidence enough to breath life into the UK property market will remain to be seen…although the rate can be reduced as much as they want if no-one is buying property and lenders are not giving any decent mortgages out then things will never change.

As always the Bank Of England site has all sorts of facts and figures which are interesting and informative, plus you can get the latest mortgage, inflation and other announcements hot of the presses!

The next rate announcement will be given on the 10th of July 2008.