As we touched on in some of our earlier articles today, the UK property market has on the whole recovered over the last 12 months but the degree of improvement is very varied across different areas of the UK. There is growing concern that both a lack of liquidity in the mortgage market, despite this being a problem for over a year now, as well as a reduction in consumer confidence could well hit the UK property market towards the back end of 2010.
UK property prices are now within 10% of their 2007 peak despite the fact that the UK economy is still struggling. However, it is becoming more and more apparent that the recovery in UK property prices is very fragmented across the UK. London and the South of England have performed better than the North and Scotland although this tends to happen during a recovery phase in the economy.
The average UK house priced increased by 0.2% in April leading to a rise of 8.5% over the last 12 months. However, on a regional basis there are major variations on the 8.5% annual increase and not every housing market in the UK is experiencing increased demand!
Despite the fact that the UK government received a warm welcome after removing home information packs from the property arena it seems that hundreds of companies in the UK have effectively been terminated overnight. A number of Hips specialists were formed when the UK government announced their introduction in 2007 and hundreds of thousands of pounds of money was invested into this new and potentially lucrative sector. But oh how things have changed!
The UK government has given permission to local councils to turn down future housing applications leading to concern that we could see a reduction in the number of homes in the UK and the price of existing homes squeezed higher. Whether this would be an artificial way to support markets in the short term remains to be seen but it is not the perfect solution to what is a very difficult and very challenging situation.
Estate agents around the UK are reporting a significant increase in the number of properties for sale after the coalition government announced the scrapping of home information packs. While these information packs have attracted much controversy since their introduction by the Labour government, nobody quite expected the immediate increase in homes for sale. It would appear that simplifying the sales process within the UK has caught the eye of many potential sellers and the market should be more fluid in the future.
Despite the fact that the vast majority of property surveys in the UK have been fairly upbeat there is growing concern about unrest in the market. There are a number of issues which are coming to the surface which include the general economic malaise in Europe, the slow recovery in the UK as well as an increase in the cost of debt for mortgage companies.
The Nationwide, the UK's largest building society and a major player in the property sector, has today issued a report suggesting that the UK property sector should remain fairly stable over the next 6 to 12 months. The lender believes that upward pressure on property prices will decrease in the short to medium term as more properties come onto the market.
As of midnight last night the UK government has scrapped Home Information Packs, otherwise known as HIPs, to the joy of estate agents around the country. It was also revealed that since the introduction of the information packs in December 2007 around £1 billion being "wasted" on what many believe were pointless and ultimately unhelpful information packs.
Figures today from Great Portland Estates seem to indicate that property values in London may have turned a corner. The company reported a 15.5% increase in net asset value per share and two new acquisitions which would seem to indicate a renewed appetite for London commercial property. So is this the turning point we have been waiting for?
