City View: Housing market recovering but still hospitalised
Oct 13 2009 by John Cranage, Birmingham Post
The housing market is back from the dead but the patient is far from ready to leave the intensive care ward.
That was the conclusion to be drawn from yesterday’s reports from Royal Institution of Chartered Surveyors (RICS) and the Council of Mortgage Lenders (CML). Both came up with figures showing that life was returning to a market that a year ago was all but moribund.
Let us look first at the West Midlands where RICS reports that house prices are firming up, largely because there is a shortage of properties coming on to the market.
The proportion of chartered surveyors reporting rising prices clawed its way up from a negative balance of 23 per cent in August to a positive five per cent.
However, the region had a sharp fall in those reporting a rise in new instructions – from plus-27 per cent in August to minus-17 per cent in September.
For the country as a whole, RICS said the net balance of surveyors reporting rising rather than falling prices rose to 21.5 per cent last month from 9.9 per cent a month earlier.
The words of this 141-year-old body, whose monthly housing snapshots have been running longer than anyone else’s: “Last month’s optimism that vendors were starting to return to the market has proved a little premature.”
In fact, nationally, the number of RICS members reporting an increase in new instructions slumped to a net balance of just four per cent compared with plus-12 per cent in August.
All of which is a pretty fair reflection of the state of the mortgage market. The number of new home loans rose by 29 per cent to about 52,700 in August, according the CML, but the total was still well adrift of the seven-year average of at least 100,000 for the month.
In cash terms, total lending, including re-mortgaging and buy-to-let loans, was 36 per cent down year on year at £12.3 billion.
Obviously, we have a long way to go before we get back to the silly-money housing boom prior to 2007 – for which relief, much thanks.
Such revival as we are seeing means that those who have to sell their homes – those who need to move in order to take up a new job, for example – are likely to find buyers, provided they keep their asking price within reasonable bounds.
There may still be a few out there salivating at the prospect of a big capital gain because they still think that rising house prices equals increasing wealth.
Otherwise it looks that while vested interests (the prime minister for one) talk up the recovery the public is not buying it (or houses, for that matter).
It will take a long time for the aftershocks of this recession to die away. Which, in a sane world, is as it should be.
