House Price Spy Blog

Average property prices have fallen for the 15th month running, certain areas in the South East of England have now fallen by as much as 13.7% in just one month. This will not be what homeowners want to hear in the festive season. The pound is low against the Euro, £1 buying just over 1.1e.

While many people will be enjoying the low mortgage rate and cuts in petrol costs this will leave many having serious thinking to do at the start of the year to get their finances in shape. Whether you are making cuts to your annual budget, looking to save money on essentials or earning a little bit extra here and there everyone will have a reality check in the month to come. January is usually a time of re-evaluation and sincere resolutions, we need to ask ourselves some questions about the way we live and the companies we use. January will be a time for retailers to think their budgets, more so than ever!

If you believe the government we have been spending too freely and borrowing to do that, were we not encouraged to do just that? Many of the methods lenders used in the past are now discredited such as cold calling offering loans, 100% mortgages, the proliferation of credit cards and others, leaving ordinary people with huge debts they are struggling to pay.

A a better note, the total number of property sales in the UK is expected to start to rise in 2009, the number of sales has fallen to just 17% of what it was at the peak of the market.

Christmas is on Thursday as you will be aware so Happy Christmas! From all the House Price Spy team, all the best and good luck for 2009!

2008 has been a great year for the site, what with our facelift and a completely new way of navigating the site making it even easier to use. We have added new members only functions and started email members with relevant activity in areas selected by them. House Price Spy is still 100% free and now gives more than ever!

So much has happened during 2008, its hard to take it all in-first there was a general fall in property prices then a recession. Anyone over the age of 20 has been through all this before, so no need to panic! My blogs have tried to look on the bright site (?), not pandering to the media scare mongering or taking the easy route of just repeating what the government say. Hopefully we will see light at the end of the tunnel during 2009 with some ‘green shoots’ appearing and some positive measures by the FSA and whoever is in Downing Street.

Whatever happens you can get free property information and analysis from House Price Spy. This will not change during 2009 hopefully we can add even more for our members!

2009 will be the year of a General Election in the UK, and many are predicting a recovery in the markets and a start of a better environment for borrowers.

Two bits of news are that the government of Ireland are pumping billions into Irish banks, so it remains to be seen how clever all those people who switched their money into Irish banks are! Plus the Bank Of England is coming under some heavy flack after its handling of the present Crisis. The BOE did not predict the current crisis and Gordon Brown was the man who gave them full control over lending rates…

The Council of Mortgage Lenders (CML) has warned the government that up to half a million households in the UK will struggle to pay their mortgages in 2009 and up to 75,000 will face some sort of mortgage default during the same period.

During 2008 over 200,000 people were reported as having some sort of difficulties meeting their mortgage payments whether this was defaults, missed payments or an enforced change to payment schedule.

The ownership of a home is one of the basic economic measures along with basics such as GDP and the ‘standard of living’ so this will not be what Gordon Brown wants to hear. The US has seen record breaking numbers of mortgage defaults and repossesions, and Gordon Brown has pledged Billion of UK tax payers money to bail out morgage borrowers.

The government was given these figures a few weeks ago, it remains to be seen what effect recent measures will have such as the drop in the lending rate and finance put in place for struggling borrowers.

PM Gordon Brown will soon announce the second part of his aid package (the first part was lending £50 billion to lenders from Public coffers) that he hopes will see credit again readily available and prop up the housing market. Sales have falled to their lowest ebb for 30 years with just 32,000 mortgages were approved during October.

While a lot has been made in recent months of the lack of sales, only 4% of households in the UK are in negative equity which considering the inflated prices in certain areas of the UK such as London, Edinburgh and popular commuter centres in middle England is not surprising.

The worst part of this whole thing are the predictions (and they are just predictions) that over 200,000 people working in property and finance will be facing unemployment over the next 2 years.

When this hits we will really see the extent of the problem, with less money in the economy and no extra cash around manufacturing will suffer and prices will rise compared with earnings.

However many people are seeing a difference in their mortgage payments almost equivilent to a payrise, how long will this last? Can we expect Gordon Brown to think in the long term as it seems likely he wont have power this time next year! We are needing some firm guidance and planning for well into 2011/2012 rather than tax cuts to ewin the next election!

The news story of the day appears to be that Gordon Brown is set to offer public money to assist families facing respossesion of their home, press figures we citing that ‘up to 75,000′ familes were in this bracket but we can take this with a grain of salt! The government scheme means that the public money will be used to pay any mortgage in danger of default, giving hard up familes a ‘mortgage breather’. £1 billion of public money has been earmarked for this bail out, which can be put into effect for properties worth £400,000 and less (so most people then!).

The US has seen millions of repossesions in the last few months and this will be a problem as long as negative equity caused by buying overpriced property and the collapse of the mortgage market.

The pound has been falling with respect to the Euro, and you cant get much more that 1.1 for the pound, this is fairly disasterous for companies who regularly buy overseas products or anyone planning a holiday. There are even those people who have speculated that this is a deliberate plan by the PM to push the UK towards joining the EU on a full basis…

Gordon Brown is not looking too clever especially after going back on his plans for changing tax for low paid workers.

There was a new blow to the finance industry announced today, millions of people across the UK may be able to claim money back on loans taken out that have errors on the loan agreements. While this may be good news for a few people struggling to pay loans ,this will mean everyone else will have to cover any shortfall in payments by paying higher rates.

The Consumer Credit Act means that any errors (including the wrong rate or other details) could mean that loans are written off, with many lenders settling out of court rather than fight a losing battle in court

The chances of this happening are higher if loan insurance (PPI premium) was taken out-at least there was some use for PPI!

This is all speculation, but this could be exactly what the average person in the UK does not want, just as the finance industry was starting to get back to something like normality.

In an even more surprising move than last month the Bank Of England have cut the mortgage rate again to 2% which is the lowest level since 1951. This follows on from last months 1.5% cut.

Many people (me included) are enjoying the lowering in their mortgage payments with almost half being cut from payments in recent month.

The government and BOE had to been seen to do something, and this will ease the hardships that borrowers have experienced. The Bank Of England have indicated that further action will need to be taken, with possible further cuts to come plus investment in mortgage and commercial debt to free up the borrowing system.

Expect more changes in the months to come, the crisis is expected to extend well into 2010.

The Government agency who produce figures for release to the press and public have been accused of sugar coating figures to soften the blow of the credit crunch.

The Land Registry do not include reposessions, auctions and other sales on the grounds that they dont reflect the full price sales figures. In reality, the figures mentioned represent ‘non-commercial’ properties only so The Land Registry CAN discount them. Other ‘non-commercial’ include multi million pound office premises etc so we would not expect them to be included!

Personally I dont see the problem, the people who have a problem with this way of producing figures are the press and lets not forget that they want a severe a story as possible to sell newspapers. Thats what killed the feel good factor in the first place! while lenders such as the Nationwide and Halifax produce more sensational figures The land Registry have been using this system for years without any complaint. Or are the press saying that The Land Registry changed the way they could their figures to suit the incumbent New Labour Government? Nope.

Yet more press anti-spin has it that over 45,000 homes will be repossesed, now where did they get these figures from? Could they have looked at the US and scaled it to the UK size population. Yet another spin!