“Three quarters of the way to recovery”!
The property market is three quarters of the way to recovery – a profound statement or a solid foundation from which to build?
The answer is a solid foundation from which to build and the three quarters of recovery is based on the three quarters of 2009 and the fourth quarter will be spring 2010.
The three quarters of recovery for 2009 has seen the first quarter were the likes of builders have acquired land, the second quarter were the houses will be built and the third quarter were the houses will be sold.
The property market in East Yorkshire, lets be honest were not interested in the rest of the country, but East Yorkshire follows obviously the national trend , other than to say that the readjustment in the property market in the four quarters of 2008 and the spring quarter of 2009, perhaps was not a great or as dramatic as other parts of the country, but never the less with a readjustment of some 20% across the board we has seen a dramatic alteration to the property market and the fixed asset values of all home owners.
The three quarters of recovery is one quarter in and already the market is following the pattern of recovery with much improved level of activity. The improved level of activity manifests itself with sheer increase in the number of viewings of properties for sale, this leads to an increase of offers being made leading to an increase number of sales being achieved. A rash of new for sale boards becoming new sale agreed boards gives encouragement to any potential seller thinking about putting their house on the market but unlike 2008 there is light at the end of the tunnel, and there is an opportunity to make sales, and more importantly to move house !!
The only brake currently on the recovery of the property market, is the money supply and the availability if more money in the property market. At the present time there are a limited number of mortgage products available which therefore act as a constraint on the re-emergence of the strength of the market in depth, and the loan to value parameter is still serving to exclude first time buyers in great numbers.
The imbalance of the property market in East Yorkshire sees a shortage of some 15,000 units required for the market to meet demand, and the availability or the easing availability of funding for purchase will improve throughout the rest of 2009 and the increase in the level of funding available will be the prediction for the fourth quarter.
The three quarters of recovery are in place, the mechanism of recovery is there for all to see and it will become clear in the later month of 2009 that the volume of activity in the final quarter of the year will continue to make up for the shortage of transactions in the spring of the year.
Paul Staniford.
Senior Partner Stanifords.com.
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ECONOMIC NEWS BRIEFING
The Bank of England’s Monetary Policy Committee surprised the markets by announcing that it would expand its quantitative easing (QE) programme by an additional £50 billion over the next three months. The improving tone of recent business surveys, underscored this week by healthy data relating to industrial production, house prices, and car sales, had arguably lessened the case for an expansion, but the MPC’s statement suggested that members were swayed by the bigger-than-expected decline in secondquarter GDP and by the continued weakness of bank lending data. UK Bank Rate meanwhile was left on hold at 0.5%, where it is expected to remain until well into next year.
This week’s positive data initially boosted sterling, which rose above $1.70 on Wednesday, but following the MPC’s QE announcement the pound slipped back to close at $1.68 on Thursday. There were no surprises from the European Central Bank which also left its key rate unchanged (at 1.0%) and, likewise, indicated that no change is likely for many months. Global PMI surveys July’s surveys showed more signs of improvement in most areas. In the UK, the services reading was the strongest in 17 months, while the manufacturing PMI rose above 50 for the first time since March 2008. In the USA, however, the services reading was slightly lower, while a modest improvement in the Euro Area’s services PMI concealed big divergences, with Germany appearing to be close to recovery as activity in France and Spain weakened UK industrial production Manufacturing output and the broader measure of industrial production were both stronger than expected in June, with monthly rises of 0.4% and 0.5% respectively.
UK housing market The Halifax said that house prices jumped by 1.1% during July bringing the annual rate of decline down to 12.1%. UK car sales The Society of Motor Manufacturers and Traders reported that new registrations in July were up by 2.4% from the same month last year. This was the first annual increase since April 2008, and reflects the impact of the Government’s scrappage scheme. UK insolvencies Personal insolvencies in the second quarter of 2009 rose to 33,073 – the highest since records began in 1960 and an increase of 27% on a year earlier. The number of company liquidations meanwhile rose to 5,055 (seasonally adjusted) and was up by 39% from last year.
Germany Industrial production fell by 0.1% in June, leaving output down by 18.1% from a year earlier. More encouragingly, manufacturing orders rose by a robust 4.5%, the fourth consecutive monthly increase, and exports jumped by 7.0%, the strongest monthly rise since September 2006. USA The US economy continued to shed jobs in July, but the monthly decline of 247,000 in non-farm payrolls was smaller than in recent months. The unemployment rate,
based on a separate survey, was fractionally lower at 9.4% from 9.5% in June.
