Realtorsmortgage

Recent statistics from the Department for Constitutional Affairs state that court actions by mortgage lenders rose to 28,476 in the second quarter of this year for those that dont follow such trends thats up over 50% on one year ago. Also, at 18,330, the number of repossession orders was the highest for 9 years.

Although yet to reach the previous peak of around 40,000 repossessions in the second half of 1991, this is a very worrying trend for homeowners and landlords alike, who have got used to permanently rising prices and historically low interest rates and borrowed against ever increasing equity either to fund a higher quality lifestyle or to pay the deposits on further investment properties.

The massive house price inflation over the recent years gives lie to Gordon Browns boasts about his low inflation economy. However the mock shock horror at the antics of yet another lying politician is of no importance. What is VERY important is the fact that it is consumer borrowing against this property price inflation that has kept the economy afloat. With house price inflation slowing, stopping, or going into reverse (depending on whose statistics you believe), people have nothing left to borrow against and are reaching their limits. Combined with the UKs near total de-industrialisation and reliance on the service sector (which has little or no export value), this is going to have a serious negative effect on the economy in the near future.

So what does that mean for you the landlord? A sudden large-scale collapse in prices – as seen in the early nineties – seems unlikely to this author because there are still more people in need of housing than there are suitable and available properties; simple supply and demand economics – people will still need property to rent.

However if the economy takes a severe downturn, aside from other problems too complex to cover here, then a lot more peoples rent will have to be met by the government. As well as the obvious strain on the taxpayer, this is quite obviously bad news for those private landlords who refuse to take tenants who are claiming housing benefit. If you think about it, Housing Benefit is better than free property advertising in that there are a constant stream of takers and the cheques definitely do not bounce!

Those negative landlords are, as in every business, the ones that will find themselves being left behind the proactive landlords who have already opened their minds and embraced the income stream generated by tenants on Housing Benefit. Although there may be problems at the moment, the council is working very hard to overcome them and make the service all that it should be.

The growth of English house prices is slowing. In contrast, both Scottish and Northern Irish house prices are heading for boom periods, according to new figures.

Nationwide predicts that house prices in Scotland and Northern Ireland are set to become increasingly dislocated from trends in England and Wales, as the countries have witnessed far faster house price growth over the year, increasing the need for larger mortgages.

House prices in Northern Ireland rose five times faster than the UK average for the past 12 months, while the last quarter saw house price inflation in Northern Ireland outpace the UK average ten fold. Scotland has also seen house price growth above the UK average.

The Northern Irish and Scottish housing markets are booming and, like their governments, have become increasingly devolved from the UK, concluded Fionnuala Earley, Nationwide’s group economist.

Meanwhile, within England, the south has resumed its position as the focus of house price growth.

House price inflation in the south of England has now outpaced the north for the third successive quarter. This follows an extended period when the south lagged behind as buyers appeared to reach the limits of affordability.

London is also once again the city with the fastest house price growth, with inflation dampening in northern cities. Nationwide reports that this is also having a knock-on effect on the areas surrounding the capital.

There is a clear pattern of acceleration in house price growth in the south in the regions closest to London, compared with last year. At the same time there is clear deceleration in all of the regions in the north, concluded Ms Earley.

According to Nationwide’s quarterly house price index, prices across the UK fell back sharply in the second quarter of the year from 2.2 per cent to 0.9 per cent. However, annual growth has remained stable.

Adfero Ltd