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Thursday, March 06, 2008

Mixed Signals From The Housing Market

Chancellor Alistair Darling told parliament yesterday that the housing market was cooling, as price growth slows down. However, he tried to balance that point by noting that it remains fundamentally strong.

Quote:

"Yes it's true that house prices are slowing down, but this is on the back of many years when house prices have been growing at 10 percent or even more in some parts of the country for many years.

I believe the housing market in this country, although it will slow down, is fundamentally strong
."

Well he would say that, wouldn't he?

The Halifax report that house prices fell by 0.3% last month (analysts had predicted a 0.2% fall).

The annual rate of house price growth is now 4.2%.

However, the buy to let sector (which to a large extent has fuelled house price growth) seems to be feeling the effects of the credit crunch, as sources of loans for new entrants are drying up.

The Royal Institute of Chartered Surveyors (RICS) said that the number of landlords instructing estate agents to rent out their properties had fallen by 1% during the final quarter of 2007. This is the first decline in ten years, and compares very unfavourably with the 11% increase the previous three months.

Banks and building societies have increasingly stopped offering buy to let mortgages.

A mixed picture, which indicates unsettled times ahead for landlords, property owners and house hunters.

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