We start this week with news that house price falls across the country have been remarkably consistent, according to the Land Registry data. This data reports house prices at the completion of sales and can lag behind the indices produced by Nationwide and Halifax, which record prices at the point of mortgages being approved, by as much as three months. However, both Nationwide and Halifax indices have been pointing to slower house price declines in recent months and have provided some evidence that they may be beginning to rise. According to the data, half the regions in England and Wales have seen a rise in price with overall house prices falling by just 0.2 % last month, the same decline as during the month before, and the smallest drop since the previous February. Prices are now 15.9 % lower than in May 2008, receding from the year on year fall of 16.5 % in February, but still standing 17.4 % below the peak prices of January 2008. Prices fell in five of the ten regions of England and Wales. They were down by the most in the north-east, where they were 4.3 % lower than in April, while prices also fell in London, Yorkshire, the east Midlands and the south-west.
Prices saw the largest increase in Wales, with only the south-east rising by less than 1 %. That compares with February, when all 10 regions saw prices fall by more than 1 %. The average property is now worth £152,497, compared with the peak value of £184,493. There is still some way to go to normality, with sales volumes in March 43 % lower than a year ago and about 70 % lower than in March 2007, before the slump began.
With the recent increases in swap rates, this week has seen frantic re-pricing activity from most lenders with the average 5 year fixed rate increasing by 0.21% since the beginning of the week. At the same time the overall number of residential fixed rate deals available has declined from over 900 to just over 800 in a working week. Moneyfacts comments, ‘ The recent increase can be attributed to the hike we saw in swap rates a few weeks ago. In June 2008 when the average rate hit its peak the margin over swap was 0.76%, today the margin is 2.35% and its hard to foresee anything other than fixed rates increasing even further’.
The Bank of England has reported that conditions in the financial system are easing, although the banking system is fragile and vulnerable to disruption. In its financial stability report, it said the total losses from the financial crisis reached $15tn (£10tn). However, this is a substantial improvement from March’s estimate of a $25tn fall in the value of such assets. The debate between the chancellor and the governor carried on this week as the Bank of England again called for further regulation, both to prevent banks getting too big and to establish tougher controls on lending.
Good news for Brokers with the number of consumers searching for a mortgage broker on the internet having leapt by 94% since September last year. Online search specialist, Infoserve, said that it has tracked a huge surge in people looking for mortgage brokers online in recent months. The results are in line with a recent report from the Citizen’s Advice Bureau, which also announced a 49% rise in mortgage and secured loans enquiries.
And finally, just to show the pick and mix market is not dead, the Woolworths brand has risen from the recession ashes and begun trading as an online business; more than six months after the ex-high street giant went into administration. In December, Woolworths’ 807 stores and distribution arm, EUK, went into administration, with £385m of debt. Within hours of the online launch, 20,000 customers registered to buy online products including the firm’s iconic pick n’ mix. The administrators are also reporting an increased interest in ex-Woolworths store premises, with 180 under offer or sold in the last few weeks. This begs the question as to whether we should concentrate on sales of fizzy cola sweets as the real indicator of a return of consumer confidence.
Regards
Wasim
