by Mark Johnston
The housing market at the current time is showing a general ‘lack of direction’ according to some experts.
According to the Halifax house price rose in October 2011 for the first time in 3 months after mortgage costs fell to record lows.
House prices increased by 1.2%, but the lender warned that it was a highly mixed picture as prices fell by 0.3% over the less volatile 3 month average.
The chief executive of Taylor Wimpey has warned that the recent euro zone crisis could plunge house prices by at least 10%.
Pete Refern, head of Britain’s second biggest house builder also added that “the worse case scenario is that a problem in Europe could cause a UK banking problem and turmoil would arise from a withdrawal of bank finance.
Analysts believe that both home owners and buyer sentiment is being driven at the moment by UK rather than European developments.
Many home owners in the UK are now reconsidering plans to sell their properties due to the economic uncertainty and as a result the housing market remains pretty flat and activity generally subdued.
The national association of estate agents (NAEA) September housing market report found that there was an unexpected surge in demand for property as the number of house hunters hit their highest levels for 4 years. The number of people registering to look for property per branch rose from 304 in August 2011 to 308 in September 2011
The number of properties for sale also increased from approximately 65 per branch to 72 across August and September.
These figures suggest that many sellers believe their properties can be sold in the current climate if priced sensibly.
Although actual sales of property have remained the same with around eight houses being sold per branch, the president of the national association of estate agents (NAEA), Wendy Evans-Scott adds “it is encouraging to see the number of enquiries is increasing and sellers need to be very realistic when pricing their property.
Robert Gardener, Nationwide chief economist suggests that “while any rise is encouraging, it does not change the picture of a market that is ‘trading water’, house price growth is likely to remain soft in the period ahead, with prices drifting modestly lower over the next 12 months”.
UK households are now under pressure from inflation that is outpacing earnings growth, unemployment at a 15 year high and as experts believe the biggest fiscal squeeze since the Second World War.
Therefore some economists have warned that even if the euro zone crisis does not affect the UK housing market, weak unemployment may push prices down by at least 5% next year. Agreeing with this Howard Archer, chief UK economist at HIS Global Insight suggests “house prices are likely to fall from current levels in the face of low consumer confidence, persistently weak economic activity and muted earnings growth.
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