According to Halifax today the Uk House Prices have fallen by 1.3% in December from previous month, it meant that the average property ended the year 1.6% cheaper than at the beginning of 2010. but it was still less than the fall in the second half of 2008.

As interest rates will be held low according to industry experts and comments from the monetary policy, I dont see any major movements in the house prices in 2011. Perhaps to the exception of London and other major sought after cities there will be bigger movements but the rest of the uk will be less volatile. All this still relies heavily on the MPC decision on interest rates.

The right type of real estate is still commanding the right sort of price, but there are so many views out there from leading economists and estate agents saying that prices overall will fall!

Who to believe? Well if you just take a sample of people aroound you buying properties I would say most of them still struggle to get a decent mortgage as lenders are not being generous on the rates and its making it hard for borrowers to access the market. So the domino effect from this will be that stranded sellers will have to reduce poor quality properties again this year in order to sell. So overall it might make the prices fall!

To get a very good mortgage nowadays ,, you need to be very lucky!

Well the race for the lenders is constant as they want only the borrowers that do not pose any sort of risk as they got their hand burned in the previous 3 years.

So if you think that one lender is being particularly generous and understanding please pass on your comments here and potential borrowers can contact them.

PJ

Spring sunshine, easy money and the lure of a “bargain” can be a dangerously seductive mix for aspiring homebuyers. Servicing an interest-only mortgage for three and a half times salary, at current rates of about 4 per cent, eats up just 14 per cent of household income compared with a long-term average of about 25 per cent. For those who believe the market may be close to bottoming out, this is enticing stuff. Buyer inquiries at estate agents are surging.

The trouble, as Capital Economics notes, is that the normally tight relationship between inquiries and new mortgage approvals has broken down over the past year, reflecting the entrenched stand-off between more risk-averse buyers and sellers holding out valiantly for 2007 valuations. Even after March’s 4 per cent rise, monthly mortgage approvals for new house purchase are still running at less than half the level traditionally deemed consistent with stable house prices.

EDITOR’S CHOICE
Manufacturing pay settlements plummet – Apr-30In depth: UK house prices – Dec-18Abbey profits leap despite rise in bad debt – Apr-29Unemployment data fuel hopes on recovery – Apr-30Hopes of UK housing recovery set back – Apr-27In depth: European house prices – Jul-21The weight of money in futures markets and spread betting sites suggests that talk of an upturn is premature. Punters have become less pessimistic lately but still expect a further 22 per cent fall in the Halifax index over the next two years, on top of the 20 per cent decline from the summer 2007 peak that has already occurred. This is broadly in line with the current 25 per cent divergence of the ratio of house prices to earnings from its long-run average of about 3.7.

With UK insolvencies and personal bankruptcies soaring, it is unlikely that rising earnings will soften the house price adjustment. Average nominal earnings growth will be about 2 per cent this year, meaning that the pain will be felt largely through falls in nominal house prices. Citi, for example, reckons nominal UK house prices will fall by a further 12.5 per cent before bottoming out in late 2010. Sellers should take what they can, now.