Quick Move Blog: July 2008

Negative Equity Threat "for 1.7m"

About 1.7 million people could be pushed into negative equity in the next year if house prices keep falling at their current rate, a report claims.

The credit ratings agency Standard & Poor's (S&P) says house prices may fall by a further 17% in the coming year.

That means 14% of all mortgage holders in the UK would find their homes were worth less than their mortgages.

House prices have been falling amid a credit crunch, induced by irresposible lending in the US sub-prime housing market, that has seen lenders cut the number of mortgages they offer.

"The downward trend in UK house prices now seems well established, and we expect prices to continue falling in the near term," said S&P.

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Mortgage Approvals Hit a New Low

The number of new mortgages approved by the major banks fell another 23% in June to a new record low.

The British Bankers' Association (BBA) said its members approved just 21,118 new home loans in June, down from 27,499 in May.

The figures were also 67% lower than in June last year.

The collapse in sales and fall in house prices has been caused by the mortgage drought, which was triggered by the credit crunch in the banking system. The issue most responsible for this was irresponsible lending on the sub-prime market in the US.

The BBA said the number of homes sold in 2008 was likely to be the lowest since the recession at the start of the previous decade.

"Another record low number of mortgages approved by the banks for house purchase means that the whole market is likely to be at its least active since the early 1990's," said the BBA's statistics director, David Dooks.

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UK House Price Fall At A Record

UK house prices showed their biggest annual fall since the Nationwide began its housing survey in 1991, according to the latest figures.

The 8.1% annual decline came after house prices dropped by 1.7% in July, the building society said.

The average home now costs £169,316 which is nearly £15,000 cheaper than in the same month last year.

The Nationwide survey found that house prices have fallen for nine months in a row and were at their lowest level since August 2006.

Property prices were still £11,000 higher than three years ago, the survey found.

"The weakening economy and poor housing market sentiment do not suggest that the market will recover quickly," said Fionnuala Earley, Nationwide 's chief economist.

Sellers were remaining reluctant to accept lower offers, which along with lack of availability of mortgages was pushing down house purchase activity. Experts expect the decline in the housing market to continue for some time.

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Mortgage Lending Falls Again

Overall mortgage lending rates have fallen again, with June's figures 3% down on May and 32% down on June 2007.

The council of Mortgage Lenders has warned that the tight lending market is likely to continue until the end of the year, wih banks continuing to experience a shortage of funds.

Gross mortgage lending fell to £23.8bn in June.

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Mortgage Market Remains Tight

According to the Council of Mortgage Lenders (CML), a recovery in the mortgage market is still some way off.

The number of loans in May for home purchases remained low at just 52,700, a 4% rise on April, but still 44% lower than the previous year's figures.

The CML suugested that the situation is likely to get worse before getting better, with lending levels continuing to remain low.

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House prices 'fell 0.9% in June

House prices 'fell 0.9% in June according to the latest report from Nationwide, one of the largest mortgage lenders in the UK.

The delcine was smaller than the 2.5% fall seen in May, but prices are now 6.3% lower that a year ago.

According to Nationwide's figures, the average is house is worth £13,629 less than last year, with the average now worth £172,415.

Nationwide said the lack of activity in the housing market was key to prices, but its analysis suggested it was movers, rather than first-time buyers who were staying put.

The low transaction levels meant the trend with prices would continue, according to Nationwide's chief economist Fionnuala Earley.

"It seems unlikely that there will be any rapid turnaround in housing market fortunes in the coming months," she said.

Quick Move Blog

Thursday, 31 July 2008

Negative Equity Threat "for 1.7m"

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Mortgage Approvals Hit a New Low

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UK House Price Fall At A Record

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Friday, 18 July 2008

Mortgage Lending Falls Again

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Tuesday, 8 July 2008

Mortgage Market Remains Tight

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Tuesday, 1 July 2008

House prices 'fell 0.9% in June

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