Recovery in the housing market?

April 3rd, 2009

With conflicting reports from the property market we could be seeing the first signs of recovery, or just a small blip. Halifax says that property prices are continuing to drop, with a 1.9% drop in March. On the other hand Nationwide say that property prices have increases 0.9% in March.

With the recession and credit crunch it can be a tough time for home owners looking to sell their houses. With many facing negative equity it maybe some time before the housing market fully recovers. I feel I’m in quite a good position, having protected my self from drop in housing prices by managing to buy £20,000 below market value. The 3 bed semi I moved into did need quite a bit of work, but I minimised costs by doing as much as I could by myself. I do not think it is a good time to sell property at the moment and will not be looking to sell my current house for a number of years.

The one part of the market that is improving rapidly is the buy to let sector. With mortgages harder to get and many people having their property repossessed many are turning to rented accommodation.

I think mortgages had to become harder to get. My parents in law were recently telling me how with their first mortgage they had to put down a minimum of 20% deposit, with the added stipulation that the whole house was redecorated within a year. That’s miles away from what the banks were doing recently. They seemed to give away 100% mortgages to anyone who walked through their door. It was very irresponsible and they are paying for it now. With that in mind I think it is a good idea that they are considering to cap the amount people can borrow to 3 times their earning and ban 100% mortgages.

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