ROOF Blog

The UK’s largest privately owned housebuilder said the availability of loans to homebuyers would be a crucial ingredient in a return to a stable housing market. Delivering an upbeat trading statement for the year to December 31, Miller Group, the Edinburgh based building, construction and property company, said it was seeing a gradual improvement in the housebuilding market in spite of a demanding economic environment. ‘Volumes are low but the demand has fallen a long way as the money to buy is not as readily available and the balance with supply is now much more in line,’ said Keith Miller, chief executive. ‘However, if we are to see any degree of long-term stability, it is crucial that the housing market gets a continuing supply of mortgages,’ he added.

The recession may have severely dented the property market, but new figures show it has also prompted a surge in official complaints against those who make their living from it – estate agents, lettings companies, developers and even surveyors show big rises. The Property Ombudsman Scheme (POS) – the best-known redress system for buyers, sellers and tenants – received well over 10,000 complaints last year, with those in the lettings sector of the market alone surging by 79 per cent since late 2008.

House prices fell in the North and the West Midlands in December as market activity dampened, exposing those regions where the recovery has been weakest. According to the Royal Institution of Chartered Surveyors (RICS), last month’s figures showed five per cent more surveyors in the West Midlands reporting prices falling rather than rising, and seven per cent more in the North. The industry body added the East Midlands and Northern Ireland to its list of areas at risk of further immediate falls. Simon Rubinsohn, chief economist at RICS, said: ‘These regions have been among the weakest for months. The best we can say is that they have stabilised lately.’

House prices defied the economic downturn last year to rise 1.1 per cent, boosted by a second-half surge in demand from homebuyers. The annual increase was the first rise over 12 months that Halifax, the mortgage lender, has recorded since March 2008. The latest rebound continued in December, with prices rising by 1 per cent over the month, the sixth monthly rise in a row, taking house prices to an average of £169,042 — 9.4 per cent higher than in April last year, when the market bottomed out. Despite the apparent buoyancy of the market, Halifax, now part of Lloyds Banking Group, gave a cautious outlook for the year ahead, warning that it expected house prices to remain flat during 2010.

Britain’s leading economists are almost unanimous in their view that house prices are still too high. Of the 70 who answered the question, 13 believed residential property prices were now fairly valued, while 55 said they were not and two did not express a view. The judgment that the housing market remains overinflated sits uncomfortably alongside extensive evidence that prices are rising rapidly. But the general view is that the recent surge in prices reflects low interest rates and low levels of supply - a situation that cannot last for long. House prices are also likely to be hit by weak income growth and still weak bank lending, economists argue.

The number of first-time buyers has dropped to its lowest point in a decade despite a significant rise in the number of affordable homes over the past year, according to figures released by the Halifax. Tighter mortgage lending criteria, recent price rises in some areas and lack of money for a deposit meant that an estimated 185,000 first-time buyers entered the market in 2009, four per cent fewer than in 2008 and just over a third of the 532,000 who bought when prices were soaring in 2002. These combined obstacles have pushed up the average age of a first-time buyer from 29 to 30, while the typical age of those buying without financial help from family or friends has risen to 36 from 33 in late 2007.

Bargain-hunters returned to the house building sector yesterday after a leading broker anticipated healthy gains for investors over the next year.

Citigroup laid the foundations for a recovery after turning buyer of Redrow, up 8½p to 131p, Barratt Developments, 6½p higher at 116p and Taylor Wimpey, 1¾p better at 35½p.

The sector has lost a fifth of its value over the past quarter over consumer spending fears for next year, but house prices, mortgage applications and housing transactions data indicate a more positive story, according to Citigroup, which reckoned shares could rebound at least 30 per cent.

The seemingly inexhaustible demand for property meant that house prices continued to rise last month, despite a fresh supply of stock coming on to the housing market.

The proportion of estate agents reporting an increase rather than a decrease in house prices was at its highest for three years, according to figures from the Royal Institution of Chartered Surveyors (RICS).

The figures show that 35 per cent of surveyors reported rising rather than falling prices in the past three months, up from 34 per cent in October and the highest quarterly reading since November 2006.

A total of 55,300 mortgages for house purchases were granted by lenders in October, the highest number since December 2007, the Council of Mortgage Lenders (CML) said today.

Activity in the housing market has increased markedly since reaching a trough in January when just 23,000 home loans were advanced during the month.

The bulk of the market is made up of home movers, with 35,600 of October’s loans going to borrowers who already own a property, a 49 per cent increase on the same period last year.

However, first-time buyer numbers have also recovered since the start of the year, more than doubling from 8,900 in January to 19,700.

The meltdown in the American housing market is not over yet, with experts warning that a rise in home foreclosures next year and in 2011 could undermine the chances of a sustained economic recovery in the United States.

The Obama administration has set aside $75 billion (£46 billion) under its homeowner bailout plan, known as the Home Affordable Modification Programme, to allow up to four million American homeowners to reduce their monthly mortgage payments and keep them from defaulting on their loans.

Yet despite efforts by the US Treasury Department to step up pressure on mortgage companies to modify more loans, take-up has been slow and the programme has been widely condemned for providing insufficient help to borrowers who have lost their jobs or who owe more than their homes are worth.