Housing Market Indicators: The Start of a New Year
The New Year gives us an opportunity to assess the impact of the extreme conditions of 2008 and take a look at what we can expect from 2009. Quick Move Now's summary of the housing market looks to key institutions and market indicators within the finance and property sectors to gain an insight into where the market is and where it’s heading.House Price Index Halifax -2.2% (monthly change) -20% (fall since peak)
House Price Index Nationwide -1.3% (monthly change) -19.1% (fall since peak)
Interest Rates 1.5%
Quick Move FTI 39%
Inflation 3.1%
Economic Growth -1.5%
Unemployment 1.92 million
*Information compiled from various sources. Quick Move Now takes no responsibility for its accuracy. Last updated 03/02/2009
What does this all mean?
* UK officially in recession- Gross Domestic Product fell by 1.5% in the last quarter of 2008 representing the greatest fall since 1980. Following on from the -0.6% GDP of the previous quarter this means that we are now officially in a recession.
* House price indices- House prices continue to fall in excess of 2% per month, and have now contributed to a drop of 20% in sale prices since the peak. The consistency of these falls would imply that we are still a long way off the bottom of the market.
* Repossessions Soar- Quarter 3 of 2008 saw the number of repossessions grow in excess of 13,000, which was 92% higher than the same period of 2007.
* Unemployment still on the up- Unemployment is already nudging the 2 million mark and there is more sobering news to come. The impact of high profile closures in the retail sector along with massive negative growth in the manufacturing sector will see the pace of unemployment pick up in the next official figures.
* Aborted chains- There was little change to the Quick Move Fall Through Index which remains around 40% of sales aborting before completion. This demonstrates a lack of confidence in house prices from buyers and mortgage lenders alike.
What to expect for the rest of the year!
The problems all started in the US with the sub-prime lending crisis. The subsequent financial meltdown has had a worldwide impact with nearly every country, industry, company and person directly affected in some way.
Unfortunately there is no quick fix and stability is unlikely to return to the UK housing market until three main issues are resolved.
Confidence- With fear of unemployment and a depreciation of assets, people stop spending. In turn retail, manufacturing and service industries freeze and the cycle becomes increasingly exaggerated.
House buyers also worry about further depreciation of the value of property after purchase and this coupled with general financial insecurity mean they delay buying.
Lending- Despite government attempts there is no miracle cure to get banks to lending again. Inter bank lending and in turn mortgage lending remains contracted as banks struggle to take account of bad debt. Mortgage products have been adjusted to limit banks risk with 25% of all deals now on offer requiring a 40% deposit. The requirement for large deposits makes life especially difficult for first time buyers who normally form the foundation of a healthy property market.
Cash- With increasing unemployment, lower salaries and bonus payments people simply have less cash to spend. In such conditions people do not want to commit to buying a new home or increasing their financial liabilities
Unfortunately the complicated inter-related issues contributing to the current property slump do not have a speedy cure. Through a combination of public and private initiatives and normal market mechanisms- confidence, lending and cash will gradually return to the system allowing the property market to stabilise. Unfortunately this is unlikely to occur in 2009 although we hope the corner would be turned in 2010.
What to do if you need to sell!
The important thing if you need a quick sale is not to allow idle marketing, if a property does not receive viewings it will not sell. Every property has a price, to say ‘nothing is selling in my area’ is hiding from the truth and your asking price is probably too high!
Although being competitively priced will give you an edge it won’t guarantee the quick sale you need. With buyers being very cautious over what they buy and high numbers of aborted sales, completion timescales are lengthy and uncertain.
However Quick Move Now has a solution!
We can buy your home to the timescales you dictate and because we use our own cash to purchase the uncertainty of a sales chain is removed. So if you need a Quick Sale don’t hesitate, contact us today!
Who are Quick Move Now?
Quick Move is the UK’s leading home buyer. We buy your house for cash ensuring a quick, secure and efficient house sale. Operating since 1998 and having bought over 2,500 properties Quick Move is the largest and most respected company in the field. If you wish to learn more about the company visit About Us and read our Ethical Charter.
If you would like to discuss our service further contact us or complete an online form to receive an online estimate of our likely offer level.
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