Sunday 25 January 2009

House market picking up or a mirage

There are one or two estate agents making encouraging noises about the housing market but it's very difficult to know whether in fact it is the usual thing of that profession talking things up to instill a bit of confidence or are there any green shoots at all. I was interested to see that this weekend's property supplement in the Western Morning News has jumped back up to 44 pages. Having said that I now see it is headed ''New Year Property Review" and I know that every so often they have an extra large edition and incorporating those words "New Year" might be the clue here.

It should be remembered of course that we have just had the Christmas and New Year holiday when people aren't focused on moving house in the way they might normally be. And because house sales have subsided to such a low number the slightest upward movement will seem like a recovery to some. I would find it surprising to see any significant upturn in the market for many months to come what with the unemployment situation getting markedly worse and general lack of confidence in the economy. Not for the first time I'm pointing out that the cost of the Home Information Packs (HIPS) is a real deterrent for someone to put their home on the market and that tumbling prices are all very well but that aspect of affordability is negated by the much higher percentage deposit that has to be made by those needing a mortgage.

Lots of properties are now being advertised with "new price" attached to them. One particular house I know of in a super situation and with land had been on the market for £1.75 million, now it can be yours for £500,000 less! With much tighter lending criteria I can't really imagine things getting very much brighter for a long time to come; I prefer to be realistic even if it sounds as if I'm being negative.

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