Residential property prices up +5.9% in 2009

Mortgage approvals to improve marginally in 2010|

Most buy-to-let landlords were profitable in 2009

New home registrations increase by +45%

Bailiffs find brothel instead of non-paying tenant

Residential property prices in the UK increased by +5.9% in 2009 after they rose by a further +0.4% in December giving an average house price of £162,103, according to the Nationwide Building Society.

This was a slight decrease on November as average house prices were £162,764.

Martin Gahbauer , Nationwide's chief economist, said: “With house purchase transactions having fallen by -65% between their January 2007 peak and their November 2008 low, a significant amount of pent-up demand had begun to build up in the housing market at the start of 2009. As interest rates hit record lows, those potential buyers with enough cash to circumvent tight credit conditions re-entered the market, leading to a steady pick-up in housing transactions throughout the year.

“The re-entry of cash rich buyers into the market coincided with an extremely low supply of property available for sale, as low interest rates limited the number of distressed sales and a significant number of home movers decided to offer their properties for rent rather than sale. This restriction in supply meant that even a relatively modest pick-up in demand was able to put upward pressure on house prices.”

House prices however are still -12.2% below their peak of October 2007, but they have rebounded by +8.9%, according to Nationwide.

Mortgage approvals to improve marginally in 2010

There were 113,457 mortgages of all types approved in November 2009, at a combined value of £12.2bn according to figures released in a Capital Economics report.

Mortgage approvals for new house purchases rose above 60,000 for the first time since March 2008 to 60,518 although this was only a marginal increase from 57,718 in October 2009. There was 24,897 loans approved for re-mortgaging in November, which was only slightly higher than October’s 10 year low of 24,513.

Approvals however are still 40% below the average level seen prior to when the credit crunch started in 2007.

In the report an economist stated: ‘ Mortgage approvals for new house purchase have more than doubled in the space of one year. However, that impressive statistic is flattered by the desperately low level to which they fell at the end of 2008.’

Most buy-to-let landlords were profitable in 2009

According to LSL Property Services, most residential landlords in the UK managed to make a profit in 2009 of £7,400pa thanks to market improvement over the last 12 months.

Despite the average landlord seeing capital drops in 2008 of £23,000 due to the dramatic decline in property values, in 2009 the loss was only £600. Although 2009 has proven to be a very challenging year, the current situation is much more hopeful than in late 2008 when landlords reported, on average, capital losses of £15,100.

LSL believes that landlords should expect to enjoy capital gains of approximately 5% in 2010 with the average yearly rental income in the UK per unit likely to remain at around £8,000. But there is the potential for a continued recovery in the real estate market which could push total annual gains up to nearly 10%.

According to LSL, it is realistic to expect house prices to increase by +5% over the course of 2010. However, the continued shortage of affordable mortgages as well as possible Government budget cuts aimed at controlling the deficit will limit the extent and speed of the recovery in the property and buy-to-let markets.

New home registrations increase by +45%

According to figures released by the National House-Building Council (NHBC) new home registrations have risen by +45% in the three-month period to November 2009, which is the highest level in over 18 months.

There were over 27,000 applications to build new homes as all regions of the UK reported higher levels of registrations than the same period in 2008, with private sector applications up a staggering +74% to 18,617.

Imtiaz Farookhi, NHBC’s chief executive, said: “Our figures continue to show a steady rise in applications, and it is good to be entering 2010 on a positive note.

“However, the first quarter of 2010 will be a key time for the house-building industry and it is vital that it is high in the agendas of all parties in the run up to the general election. This is the only way to ensure that the complex challenges of supply, sustainability, quality and consumer interest can be met in the years to come.”

Bailiffs find brothel instead of non-paying tenant

Bailiffs are warning p roperty owners to check how their buildings are being used after bailiffs from ‘National Enforcement Services’ (NES) found a lot more than they bargained for in several properties across the country.

Unsuspecting NES bailiffs have found brothels, credit card scams, and even drug houses instead of non-paying tenants when going round to collect overdue rent, and have subsequently had to contact police and report a crime scene.

Andy Coates, NES director, said: “I couldn’t believe it when the team rang to say that they had found a brothel. I was shocked and it definitely got a few raised eyebrows in the office.

“What’s worse is that landlords aren’t checking what their properties are being used for, which can have major implications on them if they are being used for criminal means.

“I would urge landlords to make it their New Year’s resolution to check and double check that their buildings are being used for the correct means. It shouldn’t be down to our qualified bailiffs to call a landlord and make them aware of what is going on.” 

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