Property, Construction & Mortgages - February 2010

UK house prices slipping says Nationwide
On 26 February 2010, Nationwide published a report showing that house prices dipped during February 2010 for the first time in10 months. Wintry weather conditions are thought to be the reason for the fall in the number of house hunters.

House prices fell by 1.0 percent month-on-month in February, with wintry weather and expiry of stamp duty holiday possible causes for decline. Martin Gahbauer, Nationwide's Chief Economist, said it was too early to predict whether February's drop would herald the beginning of a new trend and considered the quarter-on-quarter rate of inflation as a more reliable indicator of progress. The three-month comparison showed a 1.6 percent rise in the 3 months to February. The average price of a typical property sold in the UK during February was £161,320.
Full report available at: http://www.nationwide.co.uk/hpi/historical/Feb_2010.pdf 
Source: Nationwide
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January house prices up 2.1 percent since December: average house price in England and Wales now £165,088
Published on 26 February 2010, the January data from Land Registry's flagship House Price Index shows an annual price change of 5.2 percent. This is the second month in a row in which the figure has been positive and takes the average property value in England and Wales to £165,088. The monthly change from December to January is a rise of 2.1 percent.

Seven regions in England and Wales experienced increases in their average property values over the last 12 months. The region with the highest annual price change is London with an increase of 10.5 percent. The region with the most significant annual price fall was the North East with a movement of -3.4 percent.

London experienced the greatest monthly rise with a movement of 3.9 percent. The North East was the region with the most significant monthly price fall with a movement of -1.3 percent.

The most up-to-date figures available show that during November 2009, the number of completed house sales in England and Wales rose by 54 percent to 55,715 from 36,091 in November 2008.
For more information and to view the report in full, visit: http://www1.landregistry.gov.uk/houseprices/ 
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Weekly mortgage transactions 'at 2008 levels'
The number of mortgage transactions taking place on a weekly basis is currently at levels last seen in 2008, it has been reported: According to the Mortgage Trading Exchange, the amount of mortgage deals each week is now up to its highest amount since October 2008. It stated that there had been 5,272 mortgage deals brokered in the week up to 22 February 2010.
Source: http://www.mortgage.org.uk/weekly-mortgage-transactions-at-2008-levels-19637324.html 
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Landlords may expect letting agent commission refunds
A High Court ruling issued on 25 February 2010 confirmed that concerns raised by the Office of Fair Trading (OFT) about commissions overcharging by letting agents were entirely justified. As a result, a large number of residential landlords may be able to claim refunds for the commissions they paid.

The OFT had looked into concerns raised by some landlords last year regarding letting agents charging unfair commissions and sent some firms written warnings. In particular, the OFT determined that Foxtons, one of the largest of these agencies, could not justify charging clients 11 percent for lease renewals and charging a 2.5 percent fee, even if they sold the given rental unit to the tenant.

Estimates of as much as £26 million in refunds may reclaimable by landlords across the UK, following the High Court ruling and the OFT's letter.
Source: http://www.rla.org.uk/news/news.shtml?post=710
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National Association of Estate Agents says that OFT has failed to recognise need for regulation
In response to the Office of Fair Trading (OFT) Home Buying and Selling Report, published on 18 February 2010, the National Association of Estate Agents (NAEA), expressed pleasure that the OFT's study has shown the very high levels of consumer satisfaction with estate agents. However, they add, the OFT has failed to see that better regulation of the home buying and selling market is required. Buying a home is often the largest single transaction of a person's life and it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed. This is in stark contrast to the views of the Department for Communities and Local Government who are proceeding with the full regulation of lettings agents. NAEA say that this inconsistency is very difficult to understand given that the same agents and firms often deal with both sales and lettings.

The NAEA say that they would like to see a greater level of regulation to ensure that professional, qualified estate agents are not confused with agents that often fail to meet the basic professional standards the Association expects from NAEA members.

NAEA is the residential sales arm of the National Federation of Property Professionals (NFOPP), and is the UK's leading professional body for estate agency personnel, representing the interests of around 10,000 members who practice across all aspects of property services both in the UK and overseas. These include residential and commercial sales and lettings, property management, business transfer, auctioneering and land.
Source: www.naea.co.uk/news/news_details.aspx?id=525
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Scottish mortgage market recovering - but slower than UK as whole
On 24 February 2010, the Council of Mortgage Lenders (CML) published new data that showed that house purchase activity in Scotland continued to increase during the final three months of 2009.

With 14,200 loans (numbers up 4 percent) worth £1.6 billion (value up 5 percent) for house purchase in the Q4, growth in the Scottish market rose, but not as much as the increase of 9 percent in the UK overall. Although 2009 showed steady improvements in the market, Scotland's share of all house purchase loans fell to 8 percent in the quarter, the lowest share in nearly three years.

The first-time buyer levels stayed constant but the value of lending increased. Although as in the UK in general, borrowers will still have difficulty in accessing the more attractive mortgage deals, the improvement in the market will make lending criteria a little more with increased eligibility in 2010.
Source: www.cml.org.uk/cml/media/press/2564
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Number of people renting their homes is now over 3 million
On 23 February 2010, results of the first English Housing Survey were published. It showed that around 3.1 million people in England rented a property privately during 2008/09, an increase of 1 million compared with 2001, with one-person households being the most common element.

It is believed that the increase is due to elevated house prices keeping home-ownership out of reach of many people but, as the number of people owning their own homes reflects a corresponding drop, owner-occupation is still the most common form of living. Couples with no dependent children were most likely to own their own home.

Renting from a social landlord accounted for 17.8 percent of households, while 14.2 percent rented a home from a private landlord. 

The English Housing Survey is based on the responses of 17,691 people questioned between April 2008 and March 2009 and the full report can be found at http://www.communities.gov.uk/documents/statistics/pdf/1481221.pdf.
Source: www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/7299866/Rental-figures-soar-as-home-owners-decrease.html
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Halifax publishes key findings on fixed-rate mortgages
On 22 February 2010, the Halifax published research that show that fixed-rate mortgage products are now the UK's preferred mortgage option.

Since their introduction 21 years ago, fixed-rate mortgages have become more popular, accounting for 68 percent of the market in 2009 according to the Council of Mortgage Lenders (CML). It is believed that buyers consider this option as an effective way to protect themselves against Bank of England base rate increases.

The Halifax also found from further research that house prices doubled during the 2000s, despite a decrease of more than 20 percent between mid 2007 and mid 2009.
Source: Mortgage.org.uk
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January 2010 figures for the main high street banks
On 23 February 2010, the British Bankers' Association (BBA) announced that mortgage lending in January 2010 was relatively weak, showing a reaction to the inflated December 2009 market (caused by the last minute rush to beat the stamp duty deadline) and the adverse weather conditions which impacted on activity. Consumer credit declined further but personal deposits held up.

House purchase approvals fell sharply in January after being boosted in December ahead of the removal of stamp duty relief, although the average of December 2009 and January 2010 together of about 40,000 is still down on the recent average, possibly reflecting the adverse weather conditions in January. Both remortgaging and equity withdrawal loan volumes were lower than a year earlier.

A change in bank reporting practice, whereby previously securitised assets have been brought back onto statistical balance sheets, and the reorganisation of Northern Rock, raised difficulties in measuring transactions in January and, as a consequence, monthly changes may be less robust than usual.

Separate figures from HM Revenue and Customs (HMRC) showed that the number of homes sold in the UK in January more than halved compared with the previous month:

  • about 51,000 property transactions valued at £40,000 or more were completed in January: this was sharply down on the 104,000 transactions completed in December, and the lowest since February 2009.

Source: www.bba.org.uk/bba/jsp/polopoly.jsp?d=145&a=17320 
The BBA statistical release is available at: www.bba.org.uk/content/1/c6/01/73/21/January_2010_Monthly_Statistics_Release.pdf
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Green leases to be introduced in April 2010
The Residential Landlords Association (RLA) has announced that Britain is to introduce "Green Leases" in April 2010.  Initially, the programme will be aimed at the largest commercial landlords and tenants but, dependent on its success, it may be rolled out to the residential property sector as well at a later date.

Aimed at making the property more energy efficient, the landlord and tenant will sign a document called a green lease, agreeing to adopt measures that could reduce the building's carbon emissions.

The programme is the first in a series of steps to impact the rental sector, which the government hopes will contribute towards reaching its ambitious target of reducing carbon emissions by 80 percent within the next 40 years.
Source: http://www.rla.org.uk/news/news.shtml?post=708 
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Farmland prices rise as demand outstrips supply
According to the latest rural market survey published by the Royal Institution of Chartered Surveyors (RICS) on 18 February 2010, farmland prices rose in the second half of 2009. With landowners reluctant to sell during the economic downturn and land becoming a viable option again, demand has overtaken supply.

As farmland prices remained relatively constant during the recession, investors now see farmland as a stable venture. Thirty-one percent more chartered surveyors saw demand for commercial farmland rise rather than fall in the six months to December 2009 and demand for residential farmland also started to rise, with one percent more surveyors reporting it rising rather than falling.
Source and access to full report available at: http://www.rics.org/site/scripts/press_article.aspx?pressreleaseID=191
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The Post Office expands mortgage range
The Post Office has announced plans to increase the number of mortgages it offers to first-time buyers. People looking to take their first steps on to the property ladder may be interested in a new 75 percent loan-to-value (LTV) that is set to be made available by the institution. This new deal is on offer both as a tracker with a rate of 3.19 percent and a fixed-rate mortgage which can be taken over two, three and five years, with the rate beginning at 3.89 percent.
Source: www.mortgage.org.uk/post-office-expands-mortgage-range-19627326.html
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Gross mortgage lending declined in January
On 18 February 2010, the Council of Mortgage Lenders (CML) announced that gross mortgage lending declined to an estimated £9.1 billion in January 2010. This is:

  • a 32% fall from £13.4 billion in December 2009; and
  • a 21% fall from £11.5 billion in January 2009.

Although a decline is typically experienced between December and January, this is the lowest monthly total since February 2000 (£7.9 billion) and the lowest January total since 2000 (£7.4 billion). The larger than average drop between December 2009 and January 2010 confirms CML's view that house purchase activity was boosted in December 2009 by a number of borrowers trying to complete their purchase before the end of the year to take advantage of the stamp duty holiday.
The detailed figures for January 2010 are published at: www.cml.org.uk/cml/filegrab/Grosslendingtable-January2010.xls?ref=7094
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House Building: December Quarter 2009, England
On 18 February 2010, the latest national statistics on house building were released by the Office for National Statistics (ONS). Statistics in this release present figures on new build housing starts and completions in England. Figures for the UK and constituent countries are also available in separate tables also published on the same day.

The latest statistics reports on the period October to December 2009, the key points from which are:

  • There were 21,880 seasonally adjusted house building starts in England in the December quarter 2009.
  • Housing completions in England were down by three percent to an estimated 28,200 (seasonally adjusted) in the December quarter 2009 compared to the previous quarter. Compared with the December quarter 2008, completions were down by 12 percent.
  • Private enterprise housing completions (seasonally adjusted) were three percent lower in the December quarter 2009 than the September quarter 2009, and ten percent lower than in the December quarter 2008.
  • Annual housing completions in England totalled 118,000 in the 12 months to December 2009, down by 17 percent compared with the 12 months to December 2008.
  • The average energy efficiency, SAP rating, of new homes in England was 79.2 and in Wales 78.8.

Source: www.communities.gov.uk/publications/corporate/statistics/housebuildingq42009 and www.communities.gov.uk/documents/statistics/pdf/14735021.pdf
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OFT says that more innovation needed in home buying and selling market
On 18 February 2010, the Office for fair Trading (OFT) said that a shake-up in how homes are sold, including updating legislation to allow new entrants into the market, could lead to a better deal for house buyers and sellers. The OFT believes that innovation in this sector, in particular through online services, could have a dramatic impact on the cost of buying and selling a home.

The OFT's study into home buying and selling found that the housing market remains dominated by traditional estate agents with weak competition between them on price. As property prices rise during housing booms, so too do estate agents' fees.  Overall satisfaction with estate agents, however, has improved in recent years, according to research conducted as part of the study.

The OFT is also encouraging more consumers to negotiate on commissions paid to estate agents. Whilst almost a third (32 percent) of those who had used a traditional estate agent believed that the fees they had paid to their estate agent represented slightly or very poor value for money, 64 percent of sellers in the OFT's survey in England and Wales did not negotiate a lower fee. Failing to shop around and negotiate on estate agents' fees could be costing these house sellers up to £570 million a year, according to OFT analysis.
Source: www.oft.gov.uk/news/press/2010/18-10
The OFT's advice service, Consumer Direct has created key tips for consumers which can be found at: www.consumerdirect.gov.uk/hometips  
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Government boost for more rural homes
On 19 February 2010, Communities and Local Government (CLG) issued a press release following Housing Minister John Healey and Rural Affairs Minister Lord Davies naming 36 rural councils that will benefit from expert support to help design and plan up to 10,000 new homes. A large proportion of these homes will be affordable for local people, giving a boost to rural businesses and helping village schools, shops and pubs to stay open.

It is the first time that rural councils have received dedicated funding to help design and plan new development that will support the local needs of rural communities. The councils receiving funding were selected through a planning and design competition.

The 36 councils with the best ideas for rural towns and villages will share £1m funding for expert advice to build 10,000 high quality homes that will help local people stay where they want to live, and give a boost to local businesses by ensuring local staff can live close by.

The £1m fund jointly provided by Communities and Local Government and Defra will provide expert assistance and training on masterplanning and urban design. The councils that have been successful are receiving funds ranging from £4,000 to £70,000 to support work on projects, including:

  • £70,000 to develop a masterplan for 1000 homes, a school, businesses and recreation space in North Northallerton;
  • £30,000 to prepare a masterplan to redevelop the historic Bolton Copperworks site near the village of Froghall, and kickstart the regeneration of the Churnet Valley;
  • £50,000 for masterplanning expertise to redevelop the Churchfields Estate west of Salisbury, providing 1,100 homes, a neighbourhood centre, a primary school, open space and land for businesses. The site will deliver much needed homes for the area of which around 40 percent will be affordable.

The £1m support will be spent over two years (2009/10 - 2010/11) and is being funded by CLG and the Department for the Environment, Food and Rural Affairs (Defra). A 'masterplan' is a long-term, coordinated strategy for the development of an area.
Source: http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=411389&SubjectId=2
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Residential property prices on the rise
In yet another survey of the property market, Rightmove said on 17 February 2010 that residential property values appear to be rising through much of the UK, including in areas of Wales that have seen major falls in prices since the financial crisis hit in October 2008. Rightmove found that values increased by 6.1 percent over the course of the past 12 months, bringing the average price of a house in England to £229,398, which is 3.2 percent higher than figures released last month. While the 6.1 percent rise over a year is in itself a healthy increase, the last time properties increased by such dramatic proportions over a four week period was three years ago, during the real estate boom of 2007. 

But the rise in residential property prices will impact people involved in the real estate sector in different ways. While homeowners who delayed selling their properties at a time when prices were very low may find Rightmove's statistics especially positive-as will estate agents who have struggled through the credit crunch-the sudden jump in values will make it noticeably more expensive for residential landlords to expand their portfolios. 

While February's residential property price increases took some by surprise, others pointed out that these values may still fall back later this year. In fact, Ian Perry of the Royal Institution of Chartered Surveyors (RICS) noted that the limited supply of properties for sale may have artificially inflated some of these prices. Yet, if the number of houses and flats for sale increases and if buy-to-let loans and mortgages remain few and far between, values may start to decline one again. 
Source: www.rla.org.uk/news/news.shtml?post=703
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Wave of commercial real estate loan failures could threaten America's already-weakened financial system
The Congressional Oversight Panel's February 2010 report, "Commercial Real Estate Losses and the Risk to Financial Stability", expresses concern that a wave of commercial real estate loan losses over the next four years could jeopardise the stability of many banks, particularly community banks. Commercial real estate loans made over the last decade - including retail properties, office space, industrial facilities, hotels and apartments - totalling $1.4 trillion will require refinancing in 2011 through 2014. The trouble is that nearly half the loans are at present "underwater," meaning the borrower owes more on the loan than the underlying property is worth. While these problems have no single cause, the loans most likely to fail are those made at the height of the real estate bubble.

The Panel found that "a significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American. It says that when commercial properties fail, it creates a downward spiral of economic contraction: job losses; deteriorating store fronts, office buildings and apartments; and the failure of the banks serving those communities. Because community banks play a critical role in financing the small businesses that could help the US economy create new jobs, their widespread failure could disrupt local communities, undermine the economic recovery and extend an already painful recession.

There is no easy solution to this problem. Although it endorses no specific proposals, the Panel identifies a number of possible interventions to contain the problem until the commercial real estate market can return to health. The Panel is clear that government cannot and should not keep every bank afloat. But neither should it turn a blind eye to the dangers of unnecessary bank failures and their impact on communities.  The Panel believes that Treasury and bank supervisors must address forthrightly and transparently the threats facing the commercial real estate markets. The coming trouble in commercial real estate could pose painful problems for the communities, small businesses, and US families already struggling to make ends meet in today's exceptionally difficult economy.
Source: http://cop.senate.gov/reports/library/report-021110-cop.cfm
The Congressional Oversight Panel's report is available at: http://cop.senate.gov/documents/cop-021110-report.pdf
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Regulation of buy to let mortgages could see the Government's objectives to increase investment in the UK private rental sector fail 
On 15 February 2010, the Building Societies Association (BSA) said in its response to the Treasury's consultation that extending regulation to buy to let mortgages would fail to address the underlying issues in the buy to let sector and, could result in even more lenders' withdrawing from the market as new proposals fail to reflect the investment decisions that buy to let borrowers make.  The BSA says that the decision to enter into the buy to let market is an investment decision made by the borrower. Including buy to let mortgages in the same regime as owner occupied mortgages would not be practical. Subjecting buy to let investors to affordability and suitability assessments in the same way as owner occupiers is not appropriate, and would result in a further constraint in the supply of quality housing to the private rental sector.

The Government's proposal to explore extending FSA regulation to second charge lending and looks at how borrowers can be protected when mortgages are sold on, is supported by the BSA as is the proposal that firms which buy mortgage books should be regulated. It is unfair that consumers who find their mortgage is sold on by their lender are exempted from the benefits of regulatory protection that other customers receive.
Source: www.bsa.org.uk/mediacentre/press/buy_to_let.htm 
The BSA response to the consultation can be found at: http://www.bsa.org.uk/docs/circularpdfs/7041.pdf
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Mortgages could be in short supply
Some building societies face a "possibly life-threatening" fight for savers' money, the Moody's ratings agency warned on 15 February 2010. The agency advises investors on the creditworthiness of companies.

Earlier this month, mortgage lenders said they would face a shortfall of more than £300bn when banks had to start repaying emergency government finance.  Moody's said this would force some building societies to merge or seek a buyer as funding from savers dried up.

The Council of Mortgage Lenders (CML) has already warned that in the next three years, the UK's banks would have to repay about £319bn of emergency funding that the government advanced during the height of the credit crunch (a quarter of the UK's entire £1.3 trillion stock of mortgages).  The money was channelled via the credit guarantee scheme (CGS) and the special liquidity scheme (SLS). When these expire, the banks, some of which are now government-controlled with an effective 100% guarantee for their savers, will be forced to continue competing vigorously with building societies for savers' money, to continue financing their own lending activities. Lenders will continue to find it hard to borrow money from other financial institutions on the wholesale markets, which are only gradually unfreezing: The knock-on effect will be to extend the current severe level of mortgage rationing and squeeze the profitability of some lenders.
Source: http://news.bbc.co.uk/1/hi/business/8516832.stm
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House prices rose by 2.9% in 2009: latest government house price survey
On 16 February 2010, Communities and Local Government published their House Price Index for December 2009. House prices in the UK rose by 2.9 percent last year, according to this latest survey. The figures suggest that the recovery in house prices last year was not as strong as suggested by lenders: Both the Nationwide and the Halifax have said that UK house prices rose by nearly 6 percent last year.

The key points from the release are:

  • UK house prices were 2.9 percent higher than in December 2008 and 0.8 per cent higher than in November 2009 (seasonally adjusted).
  • The mix-adjusted average house price in the UK stood at £200,307 in December 2009 (not seasonally adjusted).
  • UK house prices rose by 2.9 per cent in the quarter ending December 2009. This compares with a larger rise of 3.1 per cent for the quarter ending September 2009 (seasonally adjusted).
  • Annual average house prices rose in England (3.0 per cent), Scotland (3.8 per cent) and Wales (1.0 per cent), but fell in Northern Ireland (-6.0 per cent).
  • Annual average house prices paid by first time buyers in December 2009 were 6.8 per cent higher than a year ago. Average house prices paid by former owner occupiers were 1.4 per cent higher.
  • Annual average house prices paid for new properties in December 2009 were 1.5 per cent lower than a year ago. Average house prices paid on pre-owned dwellings were 3.2 per cent higher.

Prices have now risen for eight months in a row according to the DCLG's figures. The region where they rose fastest in 2009 was London, where they went up by 4.9 percent over the year.
Source: www.communities.gov.uk/publications/corporate/statistics/hpi122009
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Shaky foundations: The recovery in British house prices is built on sand
An article in the Economist on 11 February 2010 says that house prices were the trigger for the financial crisis, so it should be good news that they have stabilised, at least in the UK and US. But it's a bit of a puzzle if you look at the way prices have stabilised:

  • Dhaval Joshi, an analyst at RAB Capital, points out, that the fall in British economic output was greater and the subsequent recovery less vigorous than in the US but British house prices are up by 10% from their lows, while American homes are only 3% above the bottom despite energetic government support, including a homebuyers' tax credit that has been extended until April 2010.
  • Mr Joshi sees the answer to this divergence in terms of supply. Between 2002 and 2006 US builders built 12m new homes while only 7m new households were formed. US homeowners are also much more likely to walk away from their debts because many mortgages are "non-recourse", meaning that lenders cannot come after borrowers' other assets. As a result, repossessions are much higher in America than in Britain: Capital Economics says that some 5m foreclosed homes will come onto the market over the next two years.
  • The repossessions story in the UK is different - the Council of Mortgage Lenders (CML) thinks that fewer than 50,000 homes were repossessed in 2009, whilst planning laws mean that the growth of new housing supply has been very limited. Throughout the past decade, British household formation outpaced the construction of new homes. Thanks in part to lower unemployment rates than America, British homeowners are not being forced to offload their houses at fire-sale prices. So there has been steady upward pressure on those few properties on offer.

Read the full article at: www.economist.com/businessfinance/displaystory.cfm?story_id=15498328
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Landlords still struggling with rental arrears
Residential landlords in Britain are continuing to struggle with tenants who are unable to make their monthly rental payments on time, or have fallen several months into arrears. Findings published by the Association of Residential Letting Agents (ARLA) suggest that earlier hopes of declining arrears may have been premature. ARLA surveyed a total of 773 letting agents, only to find that 55 percent of all members indicated that several of their tenants were finding it a challenge to make their rental payments on time. Some observers may point to the fact that fewer letting agents are dealing with arrears than during the third quarter of 2009, but ARLA's Ian Potter argued that the 55 percent rate is still a cause for concern.

Potter noted that rental arrears among tenants are closely linked to unemployment and most indicators suggest that the number of Britons out of work will either continue to rise this year, or will remain at worryingly high levels. Potter acknowledged that demand for rental accommodation continues to be significant throughout much of the country, but indebtedness is a problem among some tenants. Recently released statistics, for example, showed that more Britons were covering their rental payments with credit cards, which means that they were simply adding to their overall debt. Using credit cards to pay for accommodation amount to temporary, band-aid solutions, and the more often tenants turn to this option the higher the likelihood of falling into arrears. 

Potter expects the problem of arrears to become increasingly acute as the consequence of this "web of debt." The situation is especially troubling when landlords depend heavily on rental payments, in order to meet their own mortgage repayment obligations.
Source:  www.rla.org.uk/news/news.shtml?post=701 and  www.arla.co.uk
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Stamp duty effect on home sales
Sales of homes below the stamp duty threshold in England and Wales rose sharply in the last three months of 2009, research from Acadametrics has shown. Acadametrics is a research-based consultancy practice, focused upon the housing market.

Transactions in areas where the average price was below £175,000 increased by 10.2% compared with the previous quarter, said the Acadametrics report. But sales in areas where the average property price was above £175,000 only rose by 2.2% over the same period.

The Council of Mortgage Lenders (CML) has previously said that the stamp duty break (which ended on 31 December 2009) mostly benefited buyers who lived in the South East of England (outside of London). But the Acadametrics report found that sales skewed on particular types of properties.

The latest report from Acadametrics shows that:

  • House prices in January rose by 0.7%- the average price of all residential property transactions completed in England & Wales in January 2010 was 0.7% higher than in December. This is the ninth month in succession in which AcadHPI has increased on a monthly basis.
  • Annual price increase is 5.4%- on an annual basis, in January 2010, the average price of all residential property transactions in England & Wales was 5.4% higher than a year ago - a significant market recovery. It is the third consecutive month in which the annual rate of change in house prices is positive.

Source: www.acadametrics.co.uk/acadHousePrices.php
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Stamp duty rush caused 2-year December high in first-time buyers
According to figures released on 12 February 2010 by the Council of Mortgage Lenders (CML), the number of loans to first-time buyers hit a two-year high in December 2009, driven by a rush to buy properties in the £125,000 - £175,000 bracket before the stamp duty concession expired, The CML has also published new analysis showing how affordability, especially for first-time buyers, is complicated by the effect of low interest rates when capital repayments are taken into account.

  • December 2009 saw 24,900 loans to first-time buyers, the highest number since November 2007. At £2.9 billion, first-time buyer loans rose 26% from November 2009 both by volume and value.
  • 55% of house purchase loanswere on properties costing under £175,000 and therefore exempt from stamp duty, up from 51% in November 2009. 10,300 first-time buyers and 11,200 home movers bought a property of between £125,000 and £175,000 in December, up 63% from 6,300 and 49%from 7,500 respectively from November 2009, indicating a rush to complete purchases before January 2010, when stamp duty would have added an additional 1% of the purchase price onto the transaction costs.
  • House purchase lending in general totalled 63,000 loans worth £8.5 billion in December, up from 51,000 (£7.1 billion) in November and from 33,000 (£4.4 billion) in December 08. The number of loans for remortgage stayed the same as November at 28,000, with the value falling from £3.5 billion to £3.4 billion, and was down from 41,000 transactions (£5.7 billion) in December 2008.

Source: www.cml.org.uk/cml/media/press/2543
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Mortgage rates to rise as Bank of England rules out liquidity scheme extension
On 10 February 2010, the Telegraph reported that during the Bank of England's Inflation Report briefing, Mervyn King confirmed that the Special Liquidity Scheme which has helped lenders fund mortgages during the crisis would end in January 2011 as scheduled and will not be extended. This has triggered fears that mortgages will dry up and rates will rise sharply towards the end of the year because lenders will struggle to borrow from wholesale markets to fund deals. The Council of Mortgage Lenders, which has warned of a mortgage famine if central bank and government funding support is not extended, can expect no solution from the Bank of England.
Source: Telegraph article
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Shop Vacancy Report
Many of Britain's towns and cities are suffering from such huge shop vacancy rates that they risk becoming ghost towns, wiping hundreds of millions of pounds off property values, a study by the Local Data Company shows. Vacancy rates are showing signs of improvement in some centres but overall the trend remains doggedly upwards. Comparison retailers continue to bear the brunt of the pain with multiple retailers faring worse than independents. Geographically the big city centres of the Midlands and north continue to show stubbornly high numbers of empty shops. There is growing concern that spread of boarded-up high streets will lead to the increase in crime in towns and cities.

Town centre vacancy rates in Great Britain have risen from nearly 10 percent in the middle of 2009 to over 12 percent at the end of December 2009, which is 500 basis points above vacancy rates at the top of the market in 2007. Cities such as Wolverhampton and Bradford, where nearly a quarter of shops lie empty, could be on an irreversible downward spiral as a result of the financial crisis. The research by the Local Data Company shows retail vacancy rates across Britain rose 2 percent in the past six months of last year to 12 percent, with some towns seeing as much as 24 percent of its shops lying empty.

Grim news from Barry Gilbertson, real estate partner at PricewaterhouseCoopers, who warns that up to a fifth of vacant retail property will never be reoccupied.

The worst place in Britain, says the study, is Wolverhampton with a vacancy rate of 23.9 percent followed by Bradford and Sheffield. Scarborough has only 2.4 percent of its shops empty making the north Yorkshire coastal town the healthiest retail centre in Britain.
Further information is available at: www.bpf.org.uk/newsroom/pressreleases/document/23843/high-street-vacancies-hit-one-in-five-for-north-east-kent-and-midlands 
The Local Data Company Report is available at: www.bpf.org.uk/pdf/21569/LDC-End-Year-Report-2009.pdf 
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Mortgage arrears and possessions declined in fourth quarter of 2009
On 11 February 2010, the Council for Mortgage Lenders (CML) announced that Mortgage lenders took 10,200 properties into possession in Q4 of 2009 - 13 percent lower than in Q3, and 2 percent down on Q4 of 2008. This figure reflects the number of possessions taken by first charge lenders on both home-owner and buy-to-let mortgages:

  • In 2009 as a whole, this brought the total number of possessions to 46,000. This was lowerthan CML's most recent forecast of 48,000, and significantly fewer than the 75,000 forecast at the start of the year, but still 15percent higher than the 40,000 in 2008.
  • In terms of payment difficulties, 188,300 mortgages ended the year with arrears equivalent to at least 2.5 percent of the outstanding mortgage balance (for example, £2,500or morearrears on a £100,000 mortgage balance). This was lower than the 195,000 CML had anticipated, and 3 percent lower than at the end of the Q3 - but still 3 percent higher than at the end of 2008.
  • Within the total number of arrears cases, there is a different picture in terms of what seems to be happening among households with lower levels of arrears (where the numbers are improving), and higher levels of arrears (where the numbers are little changed). This suggests that at present some borrowers facing only modest difficulties are being helped by low interest rates to get back out of trouble, whereas those with more severe problems may be stabilising their arrears but not recovering from them, and lender forbearance is likely to be a significant factor keeping them in their homes.
  • Looking ahead, CML's current 2010 forecast of 205,000 arrears cases and 53,000 properties taken into possession may be a little pessimistic, given that unemployment is faring better than expected so far, and that low interest rates, lenders' arrears management policies, and governmentassistance schemes are working well to support many borrowers through temporary difficulties. However, it would be premature to assume that housing market recovery will necessarily follow a smooth course.

Source: www.cml.org.uk/cml/media/press/2541
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New orders in the construction industry - December 2009
On 11 February 2010, the office for National Statistics published a statistical bulletin on new orders in the construction industry - December 2009.

Orders in the three months to December 2009 were unchanged compared with the previous three month period. Orders in the 12 months to December 2009 fell by 13 per cent compared with the previous 12 months but orders in the three months to December 2009 rose by 5 per cent compared with the same period a year earlier. In the three months to December 2009, compared with the same period a year earlier, private housing orders rose by 20 per cent and public and housing association housing orders rose by 38 per cent. All orders figures quoted are seasonally adjusted and in constant (2005) prices.

Private housing orders in the three months to December 2009 rose by 41 per cent compared with the previous three month period and rose by 20 per cent compared with the same three month period a year earlier. Private housing orders in the year to December 2009 fell by 27 per cent compared with those in the previous 12 months.

Public housing and housing association orders in the three months to December 2009 fell by 19 per cent compared with the previous three month period but rose by 38 per cent when compared with the same three month period a year earlier. Public housing and housing association orders rose by 5 per cent in the 12 months to December 2009 compared with the previous 12 months. All comparisons in this sector are affected by large variations due to its relatively small size.
The statistical bulletin is available at: www.statistics.gov.uk/pdfdir/nco0210.pdf
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Buy-to-let lending in 2009
On 11 February 2010, the Council for Mortgage Lenders (CML) announced that new buy-to-let lending grew 9 percent in Q4 of 2009, an increase for the second consecutive quarter:

  • There were 25,800 new loans advanced in Q4 of 2009, up from 23,700in the Q3 but down from 38,000 in the Q4 of 2008.The 2009growth is from a very low base after a consistent decline through seven consecutive quarters.
  • Gross advances totalled £2.4 billion in Q4 of 2009, up£300 millionfrom the third quarter but down£1.6 billionfrom the Q4 of 2008. Volumes remain comparatively low, both in absolute terms and as a percentage of overall lending.
  • For 2009 as a whole, there were 93,500 buy-to-let loans advanced. This is 58 percent down on the number advanced in 2008 (222,700) and is the lowest annual volume since 2001.
  • Buy-to-let gross lending was £8.5 billion, down from £27.2 billion in 2008. Buy-to-let lending represented only 5.9 percent ofall lending in 2009 (10.7 percent in 2008), but the total value of outstanding buy-to-let loans still represented around 11.8 percent of the mortgage market despite the recent shrinkage in new business.

The very low interest rate environment continues to benefit buy-to-let borrowers as the majority of mortgages are on an interest-only basis. This has a particular benefit for those in arrears, allowing many to recover their situation if they suffer short term voids or non payment of rent by tenants. The number of landlords with arrears of more than 1.5 percent of the balance stayed the same in Q4 of 2009 at 20,700, but is 37 percent down from the 32,900 seen in the same period the year before.

The number of buy-to-let properties taken into possession in Q4 of 2009 fell by 25 percent from Q3 but rose 9 percent from Q4 of 2008. 1,200 properties - 0.10 percent of the total buy-to-let book - were taken into possession compared to 1,600 in quarter three and 1,100 in Q4 of 2008. Overall in 2009, there were 5,700 possessions (0.46 percent of the total book). This is similar to the 0.42% annual possession rate for the wider mortgage market.
Source and further statistics: http://www.cml.org.uk/cml/media/press/2540
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Mortgage and landlord possession statistics, England and Wales - Q4 2009
The mortgage statistics are released on a quarterly basis and monitor the numbers of possession claims issued and possession claims leading to orders made in courts in England and Wales. They do not indicate how many properties have actually been repossessed. Repossessions can occur without a court order being made while not all court orders result in repossession.

The number of mortgage possession claims issued in the courts dropped by 15 percent in the last three months of 2009 compared to the previous quarter, according to statistics published on 11 February 2010.  The figure is now 23,705 down to 20,061. The decrease in claims comes against a backdrop of low interest rates and increased support for struggling borrowers from both mortgage lenders and the government. The figure published today is a 26 percent drop since the last quarter of 2008.

Since November 2008, the Mortgage Pre-Action Protocol, developed by the Civil Justice Council and approved by the Master of the Rolls, has made clear that applying for repossession should be a last resort and has encouraged lenders to look again at whether arrangements could be made with those in arrears to help them get back on track.

Homeowners facing mortgage repayment problems can benefit from a number of measures introduced by the government. These include:

  • The Mortgage Pre-Action Protocol sets out clear guidance on the steps that lenders are expected to take before going to court and makes clear that applying for repossession must always be the last resort.
  • The Housing Possession Court Duty Scheme provides duty legal advisers who are available to advise anyone - regardless of income - who has a hearing listed in court on that day.
  • Changes in eligibility criteria for Income Support Mortgage Interest for homeowners getting Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance or Pension Credit. Where they have a mortgage, those benefits may include an additional element called Support for Mortgage Interest, which assists the homeowner with the interest on their mortgage.
  • The Homeowner Mortgage Support Scheme enables eligible borrowers to reduce their monthly mortgage interest payments to affordable levels for up to two years, helping them get back on track with their finances if they suffer a temporary loss of income.
  • For the most vulnerable households facing the immediate threat of repossession, there is the safety net of the Mortgage Rescue Scheme.

Sources: http://www.justice.gov.uk/news/newsrelease110210a.htm and  www.justice.gov.uk/publications/mortgatelandlordpossession.htm
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Sustainability Benchmarking Toolkit for Commercial Buildings - to help businesses measure energy use from commercial buildings
The Better Buildings Partnership (BPP) has launched a new toolkit to help businesses and landlords to measure and reduce their energy use from commercial buildings. BPP is an exclusive collaboration of London's leading commercial property owners and allied organisations, supported by the Mayor of London and the London Development Agency.

It is hoped that the toolkit will stimulate the industry to define and agree a set of industry standards and common sustainability metrics for reporting and benchmarking environmental performance.
The Sustainability Benchmarking Toolkit for Commercial Buildings is available at: www.betterbuildingspartnership.co.uk/download/bbp_benchmarking_paper_final.pdf
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It's your fault!
Bradford & Bingley, the taxpayer-owned mortgage lender, is threatening surveyors with legal action for over-valuing properties during the housing boom.  On 4 February 2010, Rebecca O'Connor wrote in The Times that the paper has learnt that the bank, whose mortgage book is now run by UKFI, the company that manages the Government's stakes in banks, is one of a number of buy-to-let and sub-prime lenders behind a mass mail-out of letters to surveyors. She says that GE Money and GMAC-RFC, which were among the biggest lenders of buy-to-let and sub-prime deals before the market crashed in 2007, have also been sending out letters to surveyors after selling homes that they had repossessed for far less than the original valuation.

The solicitors' letters state that the lender has made a loss on the sale of the property at a lower price than the original value and state that this could be a result of negligence, informing the firm that it is under investigation.

The practice, which The Times first revealed in October last year, has already forced Allied Surveyors in England and Wales, one of the UK's biggest independent surveying firms, out of business as a result of 36 professional negligence claims.

The Royal Institution of Chartered Surveyors, which represents 100,000 surveyors, has accused lenders of putting valuers' businesses at risk without any evidence that their valuation was inaccurate. Valuers must inform their PI insurer of the claim and may not be able to afford future premiums if the insurer brands them high-risk.
Read the article in full at:
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article7014
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More and cheaper mortgages than ever
Competition has been creeping back into the mortgage marketplace this year, with a number of lenders cutting their rates and around 300 new mortgage products launched in January 2010. Significantly, a number of the new deals are available at the sort of higher loan-to-value (LTV) levels not seen since the credit crisis started in late 2007.

According to data from the Bank of England, tracker mortgages, which follow the Bank of England Base rate, were priced at record low levels of interest in January, as competition in the market picked up slightly. Fixed rate mortgages also fell slightly:

  • the average rate charged on a trackermortgage fell from 3.92 percent in December 2009 to 3.63 percent in January 2010, despite the fact that the Bank Base Rate remained on hold at 0.5 percent for the 11th consecutive month;
  • the average two-year fixed ratemortgage rate charged in January 2010 was at 3.97 percent, the lowest level since June 2003, while the cost of a five-year fixed rate deal reduced marginally by 0.12 percent to 5.55 percent;
  • there was a 26 percent leap in the number of 90 percent LTV mortgage deals on offer in January 2010.

Source: www.yourmortgage.co.uk/news/3626513
Data from: Bank of England: Trends in Lending
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The property market is not all it seems
This is Money on 9 February 2010 says that the supposed boom in the property market is not all it seems. Reports may be indicating the prices are rising rapidly but the average is being skewed says property information specialist Hometrack (www.hometrack.co.uk/index.cfm). According to Hometrack research, prices are actually only rising in 7 percent of UK postcodes and the low volume of transactions is allowing wealthy buyers to distort the market. from:

Hometrack says: 'The average price of property in rising markets is 35% higher than that of the national average (£212,000 compared to £157,000).

'This highlights how pockets of the market, where scarcity of supply and equity fuelled demand, are creating upward pressure on prices.'

So is your home in one of the postcodes where prices are rising?
Read the article at: This is Money 
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Savills commercial property report
The latest Savills commercial property report published on 10 February 2010, says that development activity slipped back in January 2010 amid weather disruption and weak public sector demand.

Key Findings

  • January data pointed to a decline in commercial development activity for the first time in six months, partly reflecting a sharp drop in work on public sector projects.
  • There were also reports that bad weather conditions in January had a negative influence on commercial development activity.
  • Almost 17% of survey respondents reported a fall in total development activity, compared to 14% that signalled a rise.
  • At -2.4% in January, down from +3.6% in December, the resulting Total Commercial Development Activity Index was the lowest since July 2009. However, the latest reading signalled only a marginal rate of contraction.

Future Expectations

  • Commercial developers are optimistic about the three-month outlook for activity, according to January's survey data.
  • Positive sentiment is strongest for industrial/warehouse activity, with 23% expecting a rise and only 9% anticipating a fall. The resulting net balance was the highest for four months.
  • January data also points to confidence in the outlook for retail & leisure and office activity, although the degree of positive sentiment is still relatively subdued in the latter.
  • Anecdotal evidence attributed business confidence to forthcoming new projects.

Source: http://www.markiteconomics.com/MarkitFiles/Pages/ViewPressRelease.aspx?ID=6119
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National Park status set to increase property prices by 10%, conference is told
The creation at the end of March 2010 of what is predicted to become the UK's most visited National Park is set to  provide a significant boost to property prices, it is claimed. Property prices within the South Downs National Park could increase upwards by 10% as estate agents use national park status to improve the desirability of the area, a conference heard. It could also mean more second home owners in the area and fewer local people being able to afford property, the conference organised by chartered surveyors Smiths Gore and solicitors Adams & Remers, was also told.
  
The South Downs National Park, which has taken 60 years to come to fruition, will be unique among England's 10 existing National Parks as approximately 85% of the land is under management with 60 % given over to arable. 
  
It will also include more than 320,000 kilometres of footpaths and more than 120,000 people will live within the Park boundary and approximately eight million people living within one hour of its boundary, the conference heard.
Source: http://www.propertywire.com/news/europe/south-downs-park-prices-201002083870.html
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Snow brings January chill to housing market
Activity in the UK housing market was frozen by the snowy weather, although prices continued to rise, according to surveyors. Buying and selling activity fell during the month owing to the extreme weather conditions, the Royal Institution of Chartered Surveyors (RICS) said in a report published on 9 February 2010. 

The freezing conditions and heavy snow meant fewer homes on the market being viewed. Buyer enquiries also experienced its first fall for 14 months. House prices in London, the South East and the South West performed best in January, with Wales, Yorkshire and Humberside and the North reporting price falls rather than rises.

Nevertheless, surveyors expect the fall to be temporary with predicted rises in the coming months, driven by a shortage of supply of better quality homes.
Source and full details of the report available at: www.rics.org/site/download_feed.aspx?fileID=5820&fileExtension=PDF and www.rics.org/site/scripts/press_article.aspx?pressreleaseID=186
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Mortgage tips for first-time buyers
Unbiased.co.uk has published some top tips to help first-time buyers before getting onto the property ladder. 

They recommend advice such as looking for a property that is future-proofed and will suit your needs in years to come and making sure you have a good credit rating so that you can secure the best deal.

Consumers can try Unbiased.co.uk's 'Find a Mortgage Adviser' search on its website to help find a specialist to guide them through their finances.
'Find a Mortgage Adviser' available at: http://www.unbiased.co.uk/find-a-mortgage-adviser/
Source: Mortgage.org.uk
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£60m to lay green foundations of eco-towns
On 8 February 2010, Housing Minister John Healey backed the country's biggest ever green home building programme, with four areas sharing £60m cash to build over 600 new homes to the toughest ever environmental standards.

These 10,000 new "eco-show homes" will be built in and around the four pioneering eco-town locations in Whitehill-Bordon in Hampshire, St Austell in Cornwall, Rackheath in Norfolk and North West Bicester in Oxfordshire. Nearly a third of these homes will be affordable homes. The new homes and new neighbourhoods will be designed, planned and built to world leading environmental standards using the latest technology like smart meters to track energy use, electric car charging points, with properly insulated homes built to the toughest ever standards and systems for saving water and recycling or composting waste.  

There are plans for improving existing transport links, including rapid routes for buses with real-time travel information, green travel hubs and facilities for electric cars and bikes. Construction could also potentially create and support up to 2,000 local jobs, including apprenticeships to help advance new green building skills.
Full details are available at: Communities and Local Government  
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Rural communities will struggle to support booming older population
The number of pensioners living in rural England will increase by nearly one million over the next decade - but communities will struggle to support the ageing population boom unless more affordable homes are built for families and younger people, a campaign group has warned:

  • The National Housing Federation predicts the number of over 65s living in rural England will hit 3.23m by 2020, a rise of 907,900 (39%) from 2008;
  • But young people and families on modest incomes could increasingly find themselves priced out of villages and market towns by wealthy people relocating to the countryside - prompting fears that many rural areas will struggle to attract the moderate income workers these areas will need to care and support for the ageing population.
  • More "pensioner friendly homes" will also need to be built where there is a clear demand for them and support services will need to be made more widely available in rural communities, the Federation said.
  • Pensioners will make up one in four of the rural population (24%) by 2020, as the proportion of older people living in rural areas increases at a significantly faster rate than in urban areas.
  • The research also reveals that one in three older people (32%) in rural areas will live alone by 2020, compared to the current level of one in four. Many of these people could find themselves increasingly isolated if key services and amenities continue to disappear from rural England.

The Federation, which represents England's housing associations, said thousands of new homes needed to be built for younger families and workers to support community life and keep local schools, bus services, shops and pubs open.

Younger people would also be needed to help support the booming numbers of older people living in the countryside - in modestly paid jobs, such as health care workers.

But the huge inward migration of wealthy commuters, second home owners and retired people to the countryside has sent house prices soaring and are now £40,000 more expensive in rural areas on average than those in towns and cities - even though wages are far lower.

Many younger people and families have been priced out of their communities by a lack of affordable housing, fuelling the mass closures of shops, pubs and schools in rural areas.

The number of people on waiting lists for an affordable home in rural England has rocketed to 750,000, but a chronic shortage of new homes means many low income families are trapped in poor quality housing - unable to afford to move to more suitable accommodation nearby.
Source: http://www.housing.org.uk/default.aspx?tabid=212&mid=828&ctl=Details&ArticleID=2727
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Healey backs private tenants with extra help and protection
On 3 February 2010, Housing Minister John Healey announced new practical help and protection for tenants in privately rented homes. The moves will help tenants find safer and better homes for rent and offer extra support if they face problems with their landlords or accommodation.

The package of measures outlined in The Private Rented Sector: Professionalism and Quality: consultation responses and next steps, following on from the Rugg Review published in 2008, will ensure tenants have the information and help they need to make informed decisions about the homes they rent, legal protection and certainty about their rights and extra support to help them deal with any disputes.

The package includes:

  • A new housing hotline offering free help and advice for private tenants;
  • A 'tripadvisor' style word-of-mouth website comparing landlords;
  • A requirement for written tenancy agreements in all tenancies that will strengthen the hand of tenants in a dispute;
  • Boosting the number of tenants protected under the most commonly used tenancy agreement;
  • A National Register for Landlords to help tenants make basic checks on their prospective landlords;
  • Better regulation of letting and managing agents.

Full details are available at: http://www.communities.gov.uk/publications/housing/prsconsultresponse 
Source: Communities and Local Government
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CML warns of mortgage funding gap
On 2 February 2010, the Council of Mortgage Lenders (CML) warned the Government that unless reforms are made, homebuyers will have difficulty sourcing competitive mortgages for many years to come.

It called upon the Government to review the way lenders raise money and take steps to avert the predicted £300 billion funding gap - the difference between what property buyers wanted to borrow and the funds available to lenders - which the UK could suffer when existing government support schemes expire in 2014.

It added that, without support from government policy, re-establishing a long-term securitisation market on the scale needed to plug the funding gap could prove impossible.
Full details are available at: http://www.cml.org.uk/cml/publications/newsandviews/57/199 
Source: The Telegraph
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House prices rise by another 0.6 percent
On 4 February 2010, figures published by the Halifax House Price Index revealed that UK house prices have risen for the seventh consecutive month, rising by 0.6 percent in January 2010 compared with December 2009. The average UK home now costs £169,777, some 3.6 percent higher in January 2010 than the same period in 2009.

Although the results show a continued trend of rising prices, the Halifax has predicted that prices will be flat in 2010.

Housing economist, Martin Ellis, warned that the state of the economy would dictate the future trend for house prices. He added that, with more people were putting their homes on the market, future rises were likely to be contained.

Latest figures from financial information service Moneyfacts showed that the number of mortgage deals on offer increased by 20 percent compared with the start of 2010, with some requiring deposits as low as 10 percent.
Full details of the report are available at: Halifax House Price Index
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RICS stamp duty proposals endorsed at Lords debate on taxation
In a Lords debate, Baroness Walmsley, has supported RICS stamp duty proposals but has highlighted the shortage of housing available for young workers.  She commented that average rents from private landlords were out of reach for a young person.

The Royal Institution of Chartered Surveyors (RICS) has called for reforms to implement a marginal system like income tax, where higher rate tax would be applied only to income above a certain threshold. It also urged for stamp duty not to be charged for first-time buyers and older people downsizing their homes. 
Source: RICS News
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Mortgage lending hits £1.8 billion in December
On 1 February 2010, the Building Societies Association (BSA) announced that their members had  lent 15 per cent more in December 2009 compared with the previous month. Around £1.8 billion was lent to house buyers by building societies in December 2009, compared to £1.6 billion in November.

The BSA suggest that it is likely that this rise can be attributed to a rush from buyers keen to complete transactions before the year end in order to beat the removal of the stamp duty holiday. Despite this rise, total gross lending in 2009 was only half of that in 2008 and it is likely to remain at low levels until funding conditions improve.

The figures from November were slightly down on the month before, with building societies in October recording gross lending of £1.7 billion.

In the savings market balances held in savings accounts at building societies increased by £15 million in December 2009.
Source: www.bsa.org.uk/mediacentre/press/monthly_figures_january2010.htm
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Landlords still limited by lack of loans
Recent research by Paragon Mortgages has shown that landlords are being restricted in the rental market due to the short supply of buy-to-let loans.

The research showed that 70 percent of landlords trying to get a loan in Q4 of 2009 had found it more difficult than in the same period in 2008 and that this trend is likely to extend well into 2010. Although property values are on the increase, only 10 percent of landlords are thinking about expanding their portfolios in Q1 of 2010.

The results of the survey also showed that rental arrears in the UK had fallen in the latter part of 2009. Demand for rental property is outstripping supply, with many Britons electing to rent rather than buy currently.
Source: http://www.rla.org.uk/news/news.shtml?post=692
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Protection for tenants from defaulting landlords still necessary
Further protection for tenants from losing their homes if their landlords default on a mortgage was the subject of a second reading of Bolton MP Dr Brian Iddon's private member's bill on 29 January 2010.

Welcoming the bill, concerns were still expressed by the Residential Landlords Association and they sought an amendment to the existing rulings whereby courts could order outright possession to lenders if landlords fail to pay what's due on a buy-to-let mortgage. 

An explanatory note from the department for Communities and Local Government says that the Bill gives added protection in this situation to tenants who could find themselves homeless through no fault of their own.
Source: http://www.rla.org.uk/news/news.shtml?post=689
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House prices: Land Registry figures
December 2009 data at the Land Registry shows the first positive annual house price change since May 2008. The figure now stands at 2.5 per cent. The monthly change is 0.1 per cent, which is the eighth month in a row in which the monthly change has been above zero. This brings the average property value in England and Wales to £161,783.

The Land Registry claims that their House Price Index is the most accurate independent house price index available. Using their data set of completed sales, it is the only index based on repeat sales. It includes figures at national, regional, county and London borough level.
Source: http://www1.landregistry.gov.uk/houseprices/housepriceindex
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House prices up across just 7% of the country
On 1 February 2010, Hometrack published a report which showed a slow rise of 0.1 percent in house prices in January 2010.

There was a fall in new sales and buyer registrations, with the time taken to sell a property rising to an average of 8.6 weeks.

Numbers of homes for sale has declined, which has had the effect of bolstering prices. Prices rose in Greater London, the South East and the South West, while elsewhere in the UK prices stayed the same.

In the rising markets (just 7 percent of postcodes), the average price of a home was 35 percent higher than that of the national average (£212,000 compared to £157,000), further highlighting the effect of supply and demand. More expensive properties being sold has resulted in a distorted view of results meaning that in general housing market growth is not as good as presented.

Properties sold are generally achieving 93.5 percent of asking price compared to 88 percent a year ago.

Although affordability has been boosted by low interest rates, access to funding remains difficult.
Full details of the report available at: Hometrack survey
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House prices set to rise by 6pc in 2010
On 1 February 2010, the Centre for Economics and Business Research (CEBR) revised its forecast for growth in British house prices for 2010 to 6 percent, from a forecast of 2 to 4 percent growth made only a month ago. The strength of the upturn has been a surprise, and although the CEBR did predict that house prices would climb, it did not anticipate the rate of mortgage lending that has already been recorded for January 2010.

House prices are now expected to climb by around 20 percent by the end of 2013.

At the end of January, it was reported that house prices rose by 1.2 percent in January, doubling the 0.5 percent increase seen in December 2009 and the biggest gain since August 2009. It took annual house price inflation to 8.6 percent, the highest since October 2007.

In contrast, property intelligence group Hometrack are expected to say that prices edged ahead by only 0.1pc during January and warning that the housing market was being driven by buyers with little if any mortgage requirements and because of the low volume of transactions this could distort the picture of the wider market.
Source: The Telegraph
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CEBR revises house price forecasts
On 1 February 2010, the Centre for Economics and Business Research (CEBR) forecast that average UK property prices are expected to rise by over 6 percent during 2010, and will continue to grow by about 20 percent by the end of 2013.

Based on increased mortgage lending, the CEBR predicted levels of mortgage approvals reaching 72,000 per month by the end of this year and 90,000 by the end of 2013.

The CEBR forecast that interest rates will remain static at 0.5 percent until mid-to-late 2011, which will help to maintain growth in the house prices.

Further predictions see house price growth faltering in 2011, as public sector cutbacks and rising unemployment see the economy stagnating. 
Full details of the report available at: CEBR News Release
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