Reading through the press reports today it seems that we have more contradictory information on the UK property market, however we still stand by our summary published on 16 August … http://www.repaymortgage.co.uk/blog/2009/08/16/uk-house-price-predictions/
One of the leading estate agency companies released a report stating that property asking prices have fallen 2.2% in August 2009, with the comment that this is not a double dip in property prices as they saw a similar fall in August 2008. Well we disagree, we think that asking prices are volatile in the thin market where the volume of sales is well below the average, we remain confident that we will see prices falls over the winter of 2009 / 2010.
RICS are reporting that 10% of sales are failing due to difficulties in obtaining mortgages, and this is causing whole chains of buy-sale transactions to fail. With no short-term improvement seen for finance availability it is likely that this type of problem will continue for some time to come.
Some experts are reporting (such as David Smith of Carter Jonas) that a slight increase in interest rates could have a significant impact on the property market as more homes are put up for sale by those who can no longer afford their mortgages. We agree with this viewpoint and expect it to have a significant impact especially when combined with increasing unemployment.
On the positive side there are noises coming from Barratt suggesting they maybe about to launch a £500m rights issue. We think this may suggest they are gearing up for future house building, possibly seeing a demand increase from the back end of 2010.
