Bank of England have revealed the figures about mortgage application rejections for each month. According to the report, there is a huge increase in turning down mortgage applications since last December’s 12,000 to 16,000. CML also not lately published that mortgage lending fell by 58% in respect to previous year. Totals for mortgage lending are not also promising. In May, gross mortgage lending result at £10.3 billion. It is a 69% decrease of summer 2007 results. Strategy of lenders changed apparently. Homeowners will have harder days to be accepted for sure.
Royal Institute of Chartered Surveyors published an interesting UK residential property market report. 63% of surveyors said that the gap is becoming less each day and maybe the downturn is easing. Below is the most important figures from the search :
Overall UK average gap : Sales at 11% below the asking price
North Area : The worst results are from this area. Up to %26 percent discounts on asking prices
NorthWest Area : Slight improvements. With a yearly 2% increase, sellers acception rate is 84%
London Gap : Smallest in the country. Sales at 93% of asking price
Scotland : The most successful region with a rate of 97%
Eventhough the latest reports seem to be more positive, it is needed to be cautious against economical uncertainties, unemployment rates and hard mortgage finance issues.
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Turmoil has wiped more than 12 per cent off the value of the 500 biggest property empires by slashing almost £15billion from UK’s richest property tycoons.
The 500 wealthiest property owners were worth £117billion before the crisis a year ago. That has fallen to £102.5 billion, according to the Estates Gazette rich list. With property falling and banks circling there is every sign that the pain is only just beginning, we should prepare ourselves for more.
Among the biggest fallers is Vincent Tchenguiz, listed last year with brother Robert with £1billion. This time he is listed alone with an estimated wealth of £200million. This is really a huge value loss.
House builders David Wilson and Keith Miller lost £484 million, or 66 per cent, and £530million, or 65 per cent respectively. The Duke of Westminster remains the richest property owner with £7billion.
Inexperience plays a dominant role in UK property market crisis and according to Research And Markets organization report, younger estate agents might withdraw from the market.
‘There are already suggestions that the market as we know it today will not exist in 10 years’ time, given the currently dire state of the property market and the opportunities for developments on the Internet,’ it also says.
The report examines the UK market for estate agents, focusing on the residential property agencies. It excludes property services such as auctioneers, valuers, estate managers, property companies and property consultants.
It is estimated that there will be 2,000 fewer estate agency branches than there were at the beginning of the year, with more likely to close in 2009.
The sad fact that both the number of transactions and estate agency revenue will decline in 2008 and 2009, and the market is not expected to recover until at least 2010.
Despite the fact that annual growth of London house prices remain positive, the market declined for the last three months including July. July fall was recorded 1.6 percent following the 1.7 and 1.5 percent during June and May. It is the fastest annual rate since at least 1991.
You should remember that previous year there were a phenomenal increase rate of 36.4 annually. Total yearly slow-down for this year is 1.8 per cent.
Even given these falls the London market is still outperforming the majority of the country, with Nationwide today reporting prices across the country have fallen 8.1 per cent over the last year.
Only the super-prime market stays unaffected by the crisis, with properties valued over £10 million achieving a one per cent hike in prices during July, to stand 16.7 per cent up over the year.
Liam Bailey, Head of Residential Research at Knight Frank commented as
“The situation is unlikely to change until the mortgage market eases and the economic outlook improves. Therefore, further price falls are probable – confined to single figures if the market begins to ease, but potentially more significant if the global outlook deteriorates.”
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Nationwide: Annual % change in house prices
Number of unsold properties went to a new record since 2002 according to Rightmove Plc.
The average asking price for a home fell an annual 2 percent to 235,219 pounds ($469,544), Britain’s most-used property Web site said in a statement today. On the month, prices declined 1.8 percent, the biggest drop since December. Prices increased in London by 0.3 percent from June.
House prices will fall about 10 percent this year and 6 percent in 2009, the Ernst & Young Item Club, a forecasting group which uses the same model as the Treasury, said today. Britons, laden with a record 1.4 trillion pounds of debt, are struggling to afford homes as banks curb lending and credit costs increase.
It is suggested by sector professionals that banks need to be extra careful they don’t get blamed for a doomed crash.
The stock of unsold property per real estate agent rose for a sixth month to 77, the highest ever measured by Rightmove, from 74 in June. Prices for properties in the West Midlands fell the most on the month, declining 3.7 percent. London was the only region to show an increase in prices.
Consumer confidence is low in the face of redundancies, a pessimistic business community and ever rising energy costs.
