Housing market stuck in mud as Halifax reports highest ever prices
The housing market remains stuck in a pool of thick mud.
According to the Halifax, the UK’s largest lender, prices in the first quarter of 2018 were up by 2.7 per cent year on year, taking the average to a fresh record of £227,871, but they actually fell a bit in February and the outlook is cloudy at best.
Of more concern is that the number of approvals is low by historic standards, and falling, despite the lender arguing that a competitive mortgage market has made for home loans that are at their most affordable in a decade.
MD Russell Galley referenced that fact in his comments on the latest Halifax House Price Index, noting that activity levels have softened compared with a year ago.
“Mortgage approvals are down compared to 12 months ago, whilst home sales have remained flat in the early months of the year.”
Given the current strength of the UK jobs market, with unemployment at its lowest since 1975, you might think that there would be more people knocking on the lenders’ doors.
Thing is, it’s one thing to have a job, quite another to feel secure in it. The black hole of Brexit is probably making people reluctant to enter into the long term commitment a mortgage entails. It can’t help that real wages have been falling for nearly a year.
Another issue gumming the market up is that Britain isn’t building enough new properties. Sellers, meanwhile, appear reluctant to put the ones that they have up for sale.
None of this is good for UK plc because in a dynamic economy people need to be able to move.
Set against that backdrop, Sajid Javid took a turn on the Andrew Marr Show at the weekend, presumably with the aim of showing that the government is doing something in addition to throwing us all into its Brexit pit.
The communities secretary pledged to introduce a much needed degree of professionalism into the estate agency industry by bringing forward reforms that will require its members to hold qualifications and to be transparent about the fees they get for referring clients to solicitors and mortgage brokers.
There was also a promise to tackle some of the stress caused through the house buying process. The twin demons of gazumping (the seller accepting a higher offer after agreeing a sale) and gazundering (buyers cutting their offer price on the eve of the sale going through) won’t be slain but people will be encouraged to sign voluntary lock-in agreements. These would see them losing money if they back out of transactions without good reason.
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It’s worth noting that when Labour was in government the result of its look at the home buying process was what came to be known as “sellers packs”. They were a complete waste of time.
Nonetheless the biggest opposition party was on the mark with its criticism of Mr Javid’s plans as falling “short of the changes homeowners need”.
They’re well intentioned but tepid. The market really needs a vehicle with a bit of oomph to pull it on to firmer ground. Mr Javid appears set on attaching his rope to an entry level Ford Fiesta.
Source link: http://www.independent.co.uk/news/business/comment/house-prices-halifax-mortgages-communities-secretary-sajid-javid-estate-agents-gazumping-gazundering-a8296156.html