Despite signs of recovery in the UK property sector, both commercial and domestic, there are concerns that over the next five years we could see something of a liquidity crunch in the UK commercial property market. It is believed that banks were forced to waive certain conditions attached to property company loans in the aftermath of the credit crunch, although there is potentially around £160 billion worth of commercial property debt to be refinanced over the next five years.
The Royal Institute of Chartered Surveyors (RICS) has today issued a report into the UK property sector which appears to show a significant increase in sellers during February. The number of people placing their homes on the market increased twice as fast as those looking to acquire property in February which will place immediate pressure on UK property prices.
In a sign of the times estate agents have warned economists and analysts that homebuyers appear to be holding off in the run-up to the general election. This warning from the property sector would seem to confirm recent surveys which show that house prices appear to have stagnated after a drop in activity within the sector.
Despite the doom and gloom surrounding the UK property market it has been revealed that during 2009 the UK market was one of only five in Europe to post an increase in prices. When you consider that property values in countries such as Latvia plummeted by more than 50% during 2009 this puts the performance of the UK property market into perspective. So what does 2010 hold for UK property market?
The Nationwide, one of the more savvy lenders in the mortgage market, has this week issued a very downbeat assessment of the UK housing market. After we saw the first fall in UK property prices for 10 months, between January and February, there is growing concern at the Nationwide that we could well be on the verge of a second downward slide in the UK housing sector. But why has the Nationwide become so negative so quickly?
Today's revelation that we saw the first month on month reduction in UK house prices for 10 months has spooked many investors in the market and heightened concerns about the strength of the underlying property market and the UK economy. While it is dangerous to take any one figure in isolation there is the potential for property buyers to hold back on their buying interest in the short term and see whether this reduction between January and February is the beginning of a new trend.
February figures for the housing market in the UK showed an annual increase of 9.2% but a fall of 1% in prices compared to January. This is the first fall in UK property prices since April 2009 and while it should not be taken in isolation as the turning point of the recent trend all eyes will be on the figures next month. There were a number of specific reasons why property transactions stalled in January, with the end of the stamp duty concession in December and the icy weather is said to have put off many house buyers.
A report by the estate agent Your Move has apparently identified a link between the number of Conservative votes at general elections and the short-term direction of the UK property sector. The report shows that the increase in Conservative votes in the 1979 election (13.7 million compared to 11.5 million in 1974 election) resulted in a short-term increase of 8.6% with more people buying and selling properties.
Estate agent Foxtons has lost a case brought by the Office of Fair Trading (OFT) regarding landlord fees and the fact that the company charged landlords commission each time tenant contracts were renewed. As a consequence the company may well be forced to pay back millions of pounds in fees charged over the years although no specific estimate has been issued regarding potential compensation.
The Office for Fair Trading (OFT) has today refused to tighten regulations within the UK estate agency market despite calls for change. There had been a growing momentum in favour of further regulation and further qualifications for those operating within the market but this has been replaced by the injection of further competition to assist consumers in the future.