Housing Market Indicators: The Slump Continues
Good news is still hard to find. Prices continue to fall and sale volumes remain depressed.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 -1.7% (monthly change) -22.55% (fall since peak)
House Price Index Nationwide -0.4% (monthly change) -18.37% (fall since peak)
Interest Rates 0.5%
Quick Move FTI 33%
Inflation 2.9%
Economic Growth -1.9%
Unemployment 2.10 million
*Information compiled from various sources. Quick Move Now takes no responsibility for its accuracy. Last updated 06/05/2009
The UK property market continues to struggle in the global downturn, with prices falling and transaction volumes remaining at historically low levels.
The background to this has been economic data which has been nothing less than shocking. Economic growth has fallen at fastest rate since the O.N.S. began compiling figures and unemployment continues to rise rapidly. At the same time banks are still trying to recover from the credit crisis and balance the books.
All this means that confidence and lending remain deflated, until these return we cannot expect a housing market recovery.
Confidence is low. Unemployment and job insecurity are common and in these conditions most buyers are holding back. Even those with secure employment need much larger deposits and with prices falling very few are willing risk their hard earned savings.
Previously the property market has been stoked by easily arranged, cheap credit. Mortgage lending has decreased rapidly as banks try to reduce exposure to a falling market and repair profit margins. Therefore most buyers will require very large deposits to gain access to favourable interest rates and anyone with even a slightly dubious financial history may find agreeing a mortgage next to impossible. This excludes a huge volume of buyers who in recent years have driven the market forward.
Historic levels of credit availability are a long way off and with such a shock to banks and governments worldwide future regulation may limit credit permanently.
Demand drives competition, which in turn drives prices. As long as buyers are unwilling or unable to enter the market things are not going to improve.
Recent analysis of the 1990 price crash by Quick Move showed that property market recoveries can be very slow. According to the Nationwide it took 12 years for prices to recover to their pre-crash level.
With the depth of the current recession already eclipsing anything on record we could find recovery slow and long process.
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