Southern Property Finder Blog

With reports out this week suggesting that the housing market is not set to recover for at least another 10 years, what do you make of it all?

Banks are clearly needing to react, and have done sharply, to their “how much do you want” attitude, as greed for business has been the thorn in many banks sides this year. Tightening up on their lending policy will not hurt, but it will hurt the housing market if more and more consumers are unable to borrow within such redefined policy.

Pricing is the next issue. Lenders are going to need to make cheaper mortgages available, not only to those with significant deposits, in 2009. I feel that a Bank of England rate reduction, expected within weeks, will force the banks’ hands even further, and such a move needs to be in the first half of 2009. Gone are the days of comparing mortgage rates with the Bank of England base rate, but try explaining that to a client who has been used to that comparison for so many years.

At SPF Financial, we have already seen First Time Buyer volumes ion the South Coast increasing towards the end of 2008, as more and more schemes become available to fit their needs; be it Builder Gifted Deposits; Shared Ownership propositions; parental gifts etc. I see these numbers increasing in 2009 as more first time buyers see that renting is not the most cost effective way forward.

The rental market is growing and will continue to do so, although as mid-late 2009 greets us, the first time buyers moving onto the property ladder will mean that the rental figures will fall back slightly.

So, what do you make of all of this? Can the housing market only trickle along for the next 10 years, or is ther more that the government, Bank of England, and high street banks can still do to help move it along quicker?