Are House Prices Starting To Settle Down?
Since the last quarter of 2007 all we have heard about with regard to property values is that house prices have fallen again, in fact by the end of July this year prices have gone down for ten consecutive months, as an average across the country and new loan applications for mortgages have fallen to their lowest level for many years, as many people are still reluctant, or unable to afford to buy.
But now, a leading London estate agent, Haart, has predicted that we may be coming to the end of the current property slump. According to their research figures, prices in the London area have fallen on average by 14.5 per cent during the course of the first six months of this year, however for the month of July the drop in house values was only 0.2 per cent and Haart have suggested that prices in London are likely to fall by a further 5 per cent only for the rest of this year.
The reason given for this turnaround is due to first time buyers showing more interest in purchasing a property. With the cost of rent increasing over the past few months and property prices falling to more affordable prices, the option of purchasing a house is beginning to look more attractive once again. According to Haart, first time buyers accounted for just over 20 per cent of their enquiries in July.
Although the interest may be there from first time buyers, looking to get a bargain property, the main obstacle they face is still being able to obtain a mortgage or home loan to help them purchase the house. Following the credit crunch, many loan and mortgage providers are still struggling with their own liquidity issues and until they relax their lending criteria, many potential buyers will be denied the loan they require.
Russell Jarvis of Haart said that for someone who had a reasonable deposit saved and could be accepted for a home loan was in a strong position to buy, he said ”Vendors are beginning to accept that prices have dropped and only realistically priced properties will sell. It will remain a buyer’s market for the rest of the year.”
