A Silver Lining For Housing Market Cloud

Despite falling house prices and the overall UK credit crunch being felt by consumers, there are still some who are willing to get onto the property ladder. As the fifth month of falling house prices proceeds, the effects are starting to flow over into the building trade.

The UK’s credit crunch has seen the largest fall in house prices in the South West and East Midlands, which has shown a significant slowing of the housing market with so far a 1.4% annual growth slow down; the first of its kind since 2006.

However, Richard Donnell, the Director of Research at Hometrack, a housing intelligence business, does not seem to think the housing market is all doom and gloom.

Instead he thinks: “The modest increase in new buyer registrations is evidence of firming demand,” something he attributes to the cut in interest rates by the Bank of England.

His comments are indicative of a possible turn around in the housing market, particularly in areas such as the North of England where previously high house prices have seen many properties going unsold as the mortgages would have been just too expensive for many northern borrowers.

It is not just Richard Donnell who is fairly optimistic about the property market situation. Two of the UK’s biggest builders, Persimmon and Barratt, and other UK building companies are expected to report that reservation numbers for new property have fallen drastically.

It is predicted that they will report a downturn of around 30% in new reservations for the year on year average. Despite this, the building trade believes that the cuts in interest rates will mean that there will be renewed interest in the property market later in the year.

Barratt’s optimistic outlook means that they are continuing with incentive schemes such as their popular ‘Dream start’ scheme which allows first time buyers the opportunity to buy 75% of their property.