Gtr London 5.0%
South East 3.6%
South West -1.7%
W Midlands 8.0%
E Anglia 7.5%
Wales 0.2%
E Midlands 1.7%
North West -0.4%
Yorkshire 2.9%
North -1.0%

Overview
RightMove: “Scarce new sellers bump up asking prices by 3.2%, an average increase of £7,137 with London setting a new record of £427,987. Monthly rise reminiscent of boom-times; there has been no higher rise since April 2007 when we saw a 3.7% increase. January sees record search activity on rightmove.co.uk, up 29% on same period last year.”

Nationwide: House prices fell by 1.0% month-on-month in February. Price decline may be explained by snowy weather and expiry of stamp duty holiday. Too early to say whether February’s drop is start of a new trend.

Average price Feb 2010: £156 297.00
Monthly change: 2.9%
Annual change: 1.7%

Gtr London + 6.1%

South East + 5.6%

South West + 3.0%

W Midlands + 2.1%

E Anglia + 3.2%

Wales -2.5%

E Midlands + 1.9%

North West -0.9%

Yorkshire + 0.1%

North -0.5%

2009 ends with prices 4.1% higher than a year ago.  There are early signs of a buoyant start to 2010 as average asking prices rise by 0.4% and search activity sets new record high.  The first week of January sees strong asking price rebound of +1.2% (£2,698) reversing previous weeks’ falls of 0.9% coupled with the lowest stock this century, creating window of opportunity for sellers.  A 0% price change is forecast in 2010, with sellers advised to take advantage of expected price rises before post-election dip.  Average house price:  £ 222 261.00

In a recent release from RightMove we hear that consumer confidence has risen in the UK by 53% along with a prediction that house prices will rise in 2010 albeit slowly!

It seems that our predictions for the New Year of 2010 are on target with the interest rates still holding at 0.50% and house prices up 273% in 50 years and the average consumer feeling far more positive about house price increases for the year ahead.

Some of you may be asking whether or not it’s time to look for fixed mortgages with inflation on the up with CPI at 2.9% in December up from November’s 1.9% with controversy apparent in the press about just how quickly it could rise throughout this year, but our advice is to hold back a little longer – perhaps until the end of 2010.

The reason we say this is that most fixed rates available now are for a two year period, which could mean you having to negotiate a renewal of a fixed rate mortgage at the end of 2011, just as the competition is ‘hotting’ up and the fixed mortgage rates quite a bit higher.  If you hang on until the end of 2010 that two year period should take you through the worst of it into 2013 when the property market should have stabilised.

Another word of caution here is to be careful when choosing a lender.  If you choose the wrong one it could cost you up to £5700 a year extra! 

There is a wide variation in standard variable rates being set by the different lenders which are responsible for a difference of almost £5700 a year on a £150 000 home loan.  In simple terms, some lenders are just not passing on the cuts that they are now enjoying!  Lloyds TSB’s mortgage arm of Cheltenham and Gloucester and Nationwide BS are among the lenders offering the lowest standard variable rate at 2.5% against Chesham BS at a whopping 6.45%!  

The calculation isn’t hard to do.  At 2.5% on a £150 000 loan you’d be paying £3997.00/annum in interest but at 6.45% it would stand at £9686/annum.  Personally, I’d rather have that difference in my back pocket!  Shop around before you buy is our advice.

One of the other topics that we touched on in our predictions was the buy to let market.  Rentals are up with demand outstripping supply which is great news for those of you with property to let.   For those of you in rentals, it may be a good time to start monitoring what the new house builders are offering and see if you can your feet on the first rung of the ladder before rental prices start shooting up later this year due to that lack of demand.

House builder Redrow is releasing their New Heritage Homes portfolio on the 12th February and if these don’t suit, I’m sure they can help you find one that does!  In the meantime, take a minute to subscribe to Property Pathways monthly ezine and forward this edition to a friend to enjoy.

Despite the continuous bad news headlines churned out by the lenders and the media, it’s heartening to hear that the average person can now see a light at the end of the property tunnel.

With the prime interest rate sitting at an all time low of 0.5% it’s easy to forget that in April 2008 the prime interest rate was sitting at a whopping 5% having been reduced from the previous July’s 5.75%!

There has been a lot of talk about the UK recession in 2009 and while British consumers anticipate the unexpected in property, it seems we are set to continue to enjoy the impact of the current low interest rate for some time to come along with other positive 2010 predictions.

Reasons for optimism

- House prices have risen in 2009 despite the double dip warnings and we look set to enjoy a more moderate pace of house price increase in 2010

- The interest rate will remain at 0.5% which is way down on the 5.5% we had in May 2007.  This should last at least nine more months allowing us all a bit of extra cash and clearing the way for more money printing and continued low rates

- The buy to let market is seeing strong signs of improvement

- A weak pound has made British products cheaper, helping exporters

- The UK economy has shrunk less than we actually thought

- Loan lending is down due to lack of supply not demand!

- Offset mortgages are now being offered

- HomeBuy Direct has received an £80m extension. This is the government shared equity mortgage scheme where up to 10 000 first time buyers are helped to buy specified newly built homes.  This scheme has already received interest from over 32,000 people since September

- Green housing measures are increasing dramatically which can only improve our living standards

- A powerful stock market rally has boosted confidence.

- Natural disasters are at their lowest in a decade globally

- Unemployment rises have been smaller than originally forecast.

- The upcoming election will keep all parties on their toes and the power with the people – so vote!

- The effects of Quantitative Easing take nine months to work. QE began in March so we should start to enjoy its benefits around the New Year onwards.

- The ‘libor’ rate (a measure of bank trust) has fallen back to BELOW pre-crunch levels.

- France and Germany are just out of recession along with South Africa, Japan and the US

Obviously one of the biggest factors for 2010 is the upcoming election and all indicators are that the Conservatives will sweep the board with an overwhelming majority.  Considering their election promises of abolishing stamp duty and raising the threshold on inheritance tax, freezing council tax for two years and providing tax cuts for new jobs to get people back to work, it could be a better 2010 under their guidance for home owners and first time buyers.

Take a look at what a few of our serious property colleagues had to say about the forthcoming year in our Property Pathways 2010 Predictions column.

In conclusion, 2010 should see us well on our way to recovery!

GET READY FOR THE LATEST NEW HOMES FROM REDROW

Apparently there’s a shortage of over one million homes in the UK at present which for us poor mortals can only indicate that our houses have genuine value.   If you take the time to plough through the myriad of news, articles and gossip prevalent on the property market and the UK economy; you’ll soon see that there is still certain confusion with regards whether or not to sell at the moment.

We’ve seen house prices rise for the fourth month in a row and everyone is getting excited by this 1.2% increase nationally, but don’t be deceived into selling or remortgaging unless you’re comfortable as we’re not at full market recovery yet.   It’s tempting though as developers are putting up prices on new builds and there’s a level of certainty returning  to the market as mortgage approvals hit an eighteen month high with loans up 77% on last years figures according the British Banking Association.

Enhancing this general mood are regional trends that indicate the time scale of a property on the market has now lessened from an average of 95 days to around 77 days, suggesting that urgency has increased, pushing the balance of power toward new sellers which in turn pushes up the prices.   This feel good factor is further enhanced with the news of the Royal Bank of Scotland, Lloyds and Northern Rock being broken up and sold off to new banks instead of the usual bigger players like HSBC and Barclays, allowing us consumers more competition and therefore more choice of product!

Speculating further we have to ask whether or not the superstores will enter into the fray.  The property pundits are speculating on just how long it will be before they too, offer mortgages and back new builds.  It makes sense given that the trust factor from the consumer to Sainsbury’s, Asda, Tesco and Morrisons is at an all time high and they too are seeking new ways to leverage share of wallet.  After all, the strap line ‘Tesco. Every little helps.” would underpin such an offering beautifully!

All that would indicate that now seems like a good time to be selling and moving on.

Indeed, RightMove say this is a ‘window of opportunity for sellers’ given the upcoming 2010 election and the economic uncertainties facing the next government and home movers.  Savills, however predict house prices falling by nearly 7% in 2010 despite the 3.7% rise this year.  Who do we believe?

We all know that London generally leads the country out of property recession and, to date, the figures support strong demand in the capital with the best locations asking a premium.  Consumer confidence has risen sharply in the latest surveys and prices in areas such as Oxfordshire are steadily rising and not just holding as previously anticipated.  Sellers appear to be back in the driver’s seat according to Octobers figures but this could enter a slow down come pre-election time.

This, coupled with the new FSA reforms on mortgage lending, creates a ‘thin market’ where any change can impact dramatically on the consumer.   People who don’t sell their houses now may withdraw their properties pending the decision on the withdrawal of the temporary stamp duty exemption and VAT increases in January and, who knows if the new government will alter the requirements for HIPS.  Some will say the time is nigh whilst others remain in stasis.

It’s still a gamble but if you’re serious about selling your house, there is a window of opportunity now, just be realistic on pricing to ensure a secure sale prior to the election.

Gtr London + 6.5%

South East + 3.0%

South West +1.8%

W Midlands +1.2%

E Anglia -2.5%

Wales +1.2%

E Midlands +1.4%

North West +2.5%

Yorkshire +5.3%

North -2.5%

Overall October HPI being +2.8% change in the month on September and an overall 0.2% change in the past year.

Average house price going from £230 184 to £223 996