Lower prices fuelling the interest of owner occupiers
18 February 2009
by Mortgage Introducer
Published: 18 February 2009 15:44 | Last updated: 18 February 2009 15:44
Owner occupiers are returning to the housing market looking for bargains says RICS research released today.
Many potential purchasers believe that the market has reached a bottom but first-time buyers are still being denied access to the property ladder.
Following three successive monthly increases in the RICS new buyer enquiry series, RICS has asked further questions of its members to determine what is underpinning this sustained pick up in interest. 71% of chartered surveyors stated that lower house prices were responsible for the growth in enquires while 48% believed that buyers are increasingly convinced that the bottom of the market is in sight. Only 35% of surveyors believe that lower mortgage rates are tempting buyers. Meanwhile, just 15% referred to positive personal circumstances overwhelming negative macro concerns.
74% of chartered surveyors reported that it is existing owner occupiers who are driving the renewed level of interest while 38% of surveyors indicated that investors are coming back into the market. However, only 23% of surveyors thought that first-time buyers are a factor in the market. Interestingly, almost one in ten respondents suggested that overseas buyers were now looking for opportunities in the UK residential market, benefiting as they are, from favourable currency movements.
95% of chartered surveyors reported that existing houses were the most popular type of dwelling for those enquiring and only 32% of surveyors reported interest in flats. New build properties remain an even less attractive proposition for potential buyers.
Commenting, Simon Rubinsohn, RICS chief economist said: "Interest from owner occupiers is likely to persist over the comings months as those with large deposits look to capitalise on the drop in house prices. However, a sharply deteriorating employment picture may eat away at this improvement in sentiment pushing potential buyers back to the sidelines. To prevent this happening and help restore an orderly housing market, the government urgently needs to address the issue of the availability of mortgage finance. It is essential that guarantees for residential mortgage backed securities are introduced sooner rather than later."
Insurance firm creates 500 jobs
18 February 2009
by BBC News Website
Published: 18 February 2009 15:39 | Last updated: 18 February 2009 15:39
The internet and telephone insurance company esure is to create 500 jobs by expanding its operations in Glasgow.
Half of the new posts will be brought in over the next 18 months in customer services with a further 250 jobs created by 2014.
Esure’s expansion is being supported by a £1.4m Regional Selective Assistance grant from the Scottish Government.
The firm employs just over 600 people at the Glasgow office, which serves as its main operational UK headquarters.
The announcement was attended by First Minister Alex Salmond who described it as "a ringing endorsement" of Scotland’s workforce.
"While Scotland is not immune from the effects of recession we must not forget that we have real strengths that will help our economy recover strongly," he said.
"Not least of these is our outstanding workforce and global reputation for excellence in a number of key sectors including renewable energy, life sciences and financial services.
’Fantastic news’
"Esure’s decision is a strong reminder that, despite the huge challenges that key financial services companies are facing across the world, there are parts of the sector, like pensions and insurance, which are continuing to perform strongly in Scotland."
Esure’s building in Cadogan Street is located in Glasgow’s international financial services district, which runs between St Vincent Street and the River Clyde.
The 10-year, £1bn project, aims to deliver more than two million square feet of new office space and 20,000 new jobs.
Glasgow City Council leader, Councillor Steven Purcell, said the jobs announcement was "fantastic news" for the city.
"Esure’s decision to substantially expand its presence in Glasgow is testament to the availability and quality of the people it has employed here.
"It also underlines Glasgow’s status as a major UK centre for the insurance sector."
Bank aiming to boost money supply
18 February 2009
by BBC News Website
Published: 18 February 2009 15:37 | Last updated: 18 February 2009 15:37
The Bank of England is seeking approval from the government for a series of measures aimed at increasing the supply of money in the economy.
Technically known as quantitative easing, the aim of the process is to try to increase the amount of funds in the UK banking system.
The hope is that this will make it easier for the commercial banks to start to increase their lending levels.
Analysts said the Bank could start to introduce measures within days.
’Great uncertainty’
The Bank hinted that increased quantitative easing was necessary, as cutting rates alone may now not be enough to help the economy out of recession.
"To the extent that further cuts in bank rate could not inject sufficient stimulus, the committee would need to use alternative policy instruments," the minutes said.
"There was a great deal of uncertainty about what would happen to banks’ and building societies’ ability and willingness to lend at low levels of interest rates."
Its admission comes after a number of business groups, including the Federation of Small Businesses, said the recent rate cuts were not working, as the commercial banks were still reluctant to lend.
"The vote on rates was in line with expectations but the most important aspect of today’s minutes was the unanimous vote to write to the Chancellor to seek his consent to implement quantitative easing," said Andrew Goodwin, senior economic advisor to the Ernst & Young Item Club.
"Item believes that it is crucial that the Bank be allowed to swiftly and boldly implement this policy."
’Critical need’
The British Chambers of Commerce (BCC) said the MBC must now be bold.
"There is a critical need for aggressively pursuing quantitative and credit easing," said BCC chief economist David Kern.
"Businesses must be reassured that the MPC and the Bank will move in that direction."
Official data released on Tuesday showed that UK consumer price inflation stood at 3% in January, falling from 3.1% in December, but still above the government’s 2% target.
The UK economy contracted by 0.6% between July and September, and by 1.5% from October to December.
Meanwhile, unemployment rose to 1.97 million in the three months to December 2008 - the highest level since 1997.
The first green shoot appears in London
18 February 2009
by Mortgage Introducer
Published: 18 February 2009 15:32 | Last updated: 18 February 2009 15:32
“There are definitely some signs that the property market is starting to stir.” So says Peter Rollings, managing director of Marsh & Parsons.
He contends that the market is very close to or has even reached the bottom in London.
“No one rings a bell when property has reached its nadir. But for the following reasons we believe the very first green shoot of a recovery has appeared.”
Over 1,000 new buyers registered in January – most with deposits of 20% plus
Nine “best and final” offer situations this year including…
A flat in HollandPark which attracted 35 prospective buyers, three asking price offers and an agreed bid in excess of the asking price
Most areas of London have fallen 25-30% and are back to 2004 levels
Double of the agreed sales so far in 2009 compared to corresponding period in 2008
Greatly increased overseas buyer interest from around the world – sales agreed this year with Russians, Italians, Germans, Japanese, Chinese, Thai, Irish etc
Peter Rollings adds: “It’s worth noting that since 1945 property prices have appreciated by 174% in any 10 year period. I don’t know for certain that we have reached the bottom however what I do know is that in two years London property prices will be higher than they are now and in five years they will be substantially higher.”
