The land registry figures out yesterday show a house price rise of 0.1%.
This is significant because land registry is the only major index that tracks government data and in particular the contract prices of property sold. While other indexes track only mortgage applications, this is the only index that has prices actually paid including cash buyers who have been very active recently.
Now before you get too excited about the positive movement in the market, it's important that you understand some fundamentals:
- Unemployment is still rising,
- SME (Small medium Enterprise) lending is still very low and extremely expensive,
- GDP (Gross Domestic Product) is still in decline,
- Mortgage lending is still very tight, and
- There is still very little appetitite for competition between banks.
All this and many other factors still point to a bottoming out rather than a recovery. My prediction is that this time next year we'll be in a broad-based recovery.
The important thing for property investors is house prices, the worst is over. We still may see prices drop a little here or there but mostly it will be bouncing along the bottom.
If you have questions or want more specifics then make the time to come to one of our free workshops where I explain in detail what I write here in these blogs and back it up with the economic and cyclical data. Just call the team on +44 (0)207 923 6100 and they can tell you more…
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