House Prices - What is going on?
Are we seeing the green shoots of recovery in the housing market, have the last few months all been a ghastly dream? Has it just been a brief pull back before the market moves north again? Er, possibly not, most people, apart from short term speculators would probably still agree that the cost of a home, second home or holiday home in the United Kingdom is still too expensive. The latest figures being trumpeted (not just by estate agents) do not point to a recovery. Of course, offering a glimmer of hope is always good, especially when there has been so much doom and gloom, but Iâm having problems with the numbers.
Headlines scream: The number of mortgages approved for house purchase jumped by 19% last month (February 09) in another sign that the housing market is recovering.
Apparently the number of mortgages agreed in February was up. (but still way down on the previous February) The number of loans passed in February 09 was 37,937 or possibly 24123 or even 27156 (variable sources) the highest since last May, as declared by the Bank of England. Estate agents are also reporting more interest from possible purchasers. (Perhaps the winter has ended and people have emerged from their expensively heated homes).
However, actual home prices continued to drop in March, so there appears to be some divergence here, not all the arrows are going in the right direction. However, the good news is, according to another agency, house prices increased in March, so thats a relief.
On a less complicated note, Banks and Building Societies do seem to be coming out of hiding and are thinking about lending some money, so possibly some buyers will be tempted to jump on to the market at some very attractive interest rates. In some kind of semblance of common sense, its being suggested that any would be purchaser should contribute a down payment of up to 15 % of the purchase price, why didn't anyone think of this before, it's a great idea. However, the number of first time buyers (mainly the young) may not be able to afford this, so either someone has to come up with some new initiatives or the cost of a home has to fall to a more realistic level.