Year on year figures perhaps help put things in perspective – this January figures were 1.1% down on last January’s, with an average price of £161,602.

Robert Gardner, of Nationwide, is reported as saying:

“January’s data does little to alter the picture of a sluggish market that has been evident since the summer. Indeed, the three-month-on-three-month measure of house prices, which is a better measure of the underlying trend, showed a fall of 0.5%, consistent with the gradual moderation in prices that has been in place since the summer of 2010. The outlook is still highly uncertain, but the most likely outcome is that the pattern of low transaction levels and prices moving sideways or modestly lower will continue through 2011.”

We have to assume that an increase in the cost of living, as evidenced by the latest inflation figures, has negatively effected demand for housing.  Will these latest figures cause the Bank of England to raise interest rates?  The general consensus seems to be that this will not happen until the second half of this year and even then the rise will be a gradual one.

As far as the housing market is concerned, the view taken by the experts seems to be that although prices will continue to fall this year we are not headed for a property market crash.

Despite this, the housing market is stagnant – borrowers unsurprisingly lack the confidence to take out new mortgages or increase existing ones.

Perhaps a sign of the times is that during December 2010 total lending to individuals reduced by £117m – this figure includes both secured and unsecured loans – only the third time this has happened since records began.

It hasn’t always been thus; when my then husband and I bought our first home back in 1972, our parents looked on with an almost tangible pride. You see, they lived in council houses – and council estates in those far away days were not the bridge-too-far that they are seen to be now. Most council home owners cared for their property every bit as much as if they owned the bricks and mortar themselves; true, at my ‘posh’ all girls grammar school I was looked down upon for a while – I was the first ‘estate-kid’ to be admitted to that school and most of my peers were the daughters of bank managers and solicitors. The fact remains that, before the first World War, over 90% of the population rented their homes. Wealthy folk who could quite easily have afforded to buy a house didn’t bother because the link between social status and home ownership hadn’t evolved.

Following the war women’s magazines, spurred on by the men coming home from the front, were filled with articles on homemaking, family and marriage and the idea of home ownership grew more and more attractive. This was compounded by the labour government, which viewed home ownership as a way for the electorate to free themselves from tyrannical landlords.

Thatcher and Hesseltine’s Housing Act of 1980 allowed tenants who had lived in their homes for at least three years to buy at 33% discount of the market price and 44% for a flat; if you had been living in your council home for more than 20 years the discount increased to 50%. Following this, home ownership soared, growing from 55% of the population in 1980 to 64% in 1987. When Thatcher left office in 1990, home ownership stood at 67%. An all time high of home ownership was reached in 2003 when 71% of the population were owner occupiers.

During the intervening years the British population has hankered to fill their homes with the latest fixtures and fittings and home improvement programmes fill our television screens whilst the newsagents’ shelves groan beneath the weight of home improvement magazines. But is the Sarah Beeney generation on its way out?

The past three years of economic turmoil and housing market stagnation has led to a sea-change and Britain is rapidly becoming a nation of renters and investing home improvers. The number of home owners has fallen to 67% and that number is forecast to fall to 60% by 2020

With mortgage companies demanding £20,000 as a deposit, first time buyers stand little chance of getting on the housing ladder without help from their parents and the credit crunch means that far fewer parents are in a position to help their offspring to do so.

It shouldn’t be surprising then that those privately renting their homes make up 14% of the population, a significant rise from the 8% of the late eighties. Leading estate agent, Savills, predict a rise in this figure to 20% within the next ten years. Additionally, a survey by the Chartered Institute of Housing undertaken last year revealed that only 33% of 18 to 24 year olds believe that home ownership is the ‘ideal living situation.’

As Elizabeth Day said in yesterday’s Guardian, “we are faced with a situation where home ownership, the ultimate aspiration of generations of Britons, is becoming increasingly untenable. On the one hand, house prices still remain too high for most of us. On the other, social housing has become a marginalised sector, associated with deprivation and impoverished life chances. Those who earn more than £12,000 a year but less than £25,000 are stuck in between – too rich for social housing; too poor for the mortgage lenders.”

Surely, the time is ripe for the development of a safe and reputable rental sector; certainly, if you can afford to invest in property this is the time to be doing so. Perhaps you should be busily seeking out repossessions…

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As a nation we continued to spend during the height of the credit crunch and in so doing fuelled a 1.2% recovery in the British economy last quarter – the best growth for 10 years or so. Now, however, it seems we have finally got the message – there are going to be cuts and job losses. So we are beginning to tighten our belts – moving us towards that dreaded double dip; among the economists and money men this phenomenon is known as the dead cat bounce, which would be funny if it wasn’t so very descriptive.

Now, I’m not sure if my next question is politically incorrect or not, but I’m going to ask it anyway: isn’t this sort of thing just talking us into that double dip? Isn’t it possible (probable) that all the negative chatter pushes Mr and Mrs Average to tighten their belts and stop spending? The new government have emphasised the need for cuts, and of course we do have to pay for our previous profligacy, but aren’t they just labouring the point to highlight the differences between their approach and the economic laxity of the outgoing government?

It’s all very well us being primed for what is to come but I worry that by painting such a negative picture we are simply building up the impetus for the cat to bounce even higher than it would have done anyway.

As a writer, rather than an economist, it would be interesting to hear your take on this issue – and I stand to be corrected if need be!

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Are we losing the plot here? On Friday of last week, we reported that:

According to the Nationwide:

“In August prices fell by 0.9%, following a smaller, 0.5% decline in July. The average UK house price is now around £166,500.
Prices fell 0.9% last month, following a 0.5% decline in July, Nationwide said, adding that it was the first time that prices had fallen for two consecutive months since February 2009.”

One week later and it’s time for the Halifax view of the housing market.

According to the Halifax:

UK house prices edged up 0.2p% in August, confounding expectations of a fall as a strengthening economic recovery helped support demand. The latest monthly increase follows a rise of 0.7% in July and reverses most of the falls seen during the previous three months. The average home now costs £167,953, a 9% increase on the low reached in April last year, but still 16% below the August 2007 peak

Confused? Yes, so are we.

Perhaps we should look to the Bank of England for clarification?

According to the Bank of England:

Bank of England data showed that only 48,722 mortgages were approved for house purchase during July, a level that economists consider to be consistent with house price falls.

A case of ‘you pay your money and take your choice’ perhaps.

Or maybe it something to do with ‘lies, damned lies and statistics?’

Figures released by the Nationwide Building Society today reveal that house prices have fallen for the second month in a row, the first time this has happened since February 2009.

In August prices fell by 0.9%, following a smaller, 0.5% decline in July. The average UK house price is now around £166,500.

Prices fell 0.9% last month, following a 0.5% decline in July, Nationwide said, adding that it was the first time that prices had fallen for two consecutive months since February 2009.

The average house price now stands at just over £166,500. Nationwide said prices had “essentially stagnated over the summer,” and explained that the increase in house sellers has given house buyers greater bargaining powers. However, Martin Gahbauer, chief economist for the building society, warned: “Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development.”

Richard Hatch of Carter Jonas property consultancy was rather more upbeat in his interpretation of the figures, saying: “We do not expect two months of consecutive declines to be the beginning of a sharper downward price trend. The market is simply readjusting after getting ahead of itself. The market is stabilising, not collapsing.”

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A spokesman for Ernst and Young, Dougald Middleton, said, “While the survey shows that costs of borrowing have eased over the last quarter, we think credit conditions have turned over the last three or four weeks.”

The outlook seems distinctly gloomy for consumers, and banks are blaming this forecast on the tightening of wholesale funding. Conversely, the default rate on mortgages and loans has fallen, so it’s good news for the banks at least.

House Price Index
is a government site publishing monthly housing market statistics. For serious research, this site and its associated pages are a mine of information: you will find year-on-year comparisons; statistics relating to new buyers and owner-occupiers; regional variations and all manner of related data

Our Property
provides information from the Land Registry on the actual selling prices of UK wide property; in short, this site helps you see beyond the estate agents’ patter. If you’re looking to buy, you’ll know whether the asking price is realistic or inflated and, if you’re selling, you’ll be more realistic about what your property will achieve.

Property Snake
is the opposite of the property ladder in that it shows you properties where the selling price has been reduced. The site is run by an anonymous owner in his or her spare time; having said that, we tried it out with a couple of post codes and the information was remarkably accurate.

Priced Out
is a campaigning website for first time buyers and provides some very useful links for this particular group.

UK Property Auctions
does exactly what it says on the tin – it is a portal to the UK property auction market.

Bank of England
this is self-explanatory. However this link will take you straight to the Monetary Policy decision page where you will find the latest on interest rates.

Which Way Homes
explains the ups and downs of the property market in a down-to-earth, jargon-free way.

If you find other useful sites or would like to comment on the sites listed above, why not tell us on the forum?

Writing in today’s Daily Telegraph, Ian Campbell explains:

The problem stems from lack of funds for both lending banks and first time buyers. Lending banks previously relied on deposits made by UK savers backed up by borrowing from residential mortgage-backed securities (RMBS) – two thirds of RMBS were sold to foreign investors. Then, in 2008, the RMBS market ceased to exist, having been bought by the US Federal Reserve. The Bank of England set up two special funding schemes to help fill the gap left by the RMBS but both are due to end in 2014. When that happens, the Council of Mortgage Lenders calculates that Britain’s lenders will face a funding gap of £300 billion.

These are the facts behind the rise in deposits – first-time buyers are being asked for almost three-times the deposit they would have put down three years ago. No wonder then that, whilst mortgage approvals improved last year, they only reached half the levels of the boom years.

So, lack of funds leads to lower house prices; the average would have to fall 17% for the ratio of price to earnings to get back the long term level of 4 from the current 4.8. The powers that be need to make a concerted effort to prop up growth and earnings if the property market isn’t to fall even farther than before.

Property Bee works alongside the agents listed below and shows any changes in price and details since the property was listed. In brief, you can find the following information:

• When the property was put on the market
  
• Price changes (up and down) since the property was listed
  
• Whether the property has gone STC and come back onto the market
  
• Any changes to the details since the property was listed
  

This is powerful information to have in hand when bargaining.

What Estate Agents does Property Bee Work with?

What does Property Bee Cost?

Nothing! Property Bee is free to download and use.

Firefox

If you don’t use Firefox, that’s no problem, although it is rated as one of the best internet browsers available. However, you can hang on to your favourite browser; Firefox can be installed along side your existing Web browser and you can even use both at the same time if you wish. Firefox is available for Windows, Linux and Macs.

To install Firefox: go to mozilla.org and follow the prompts.

To use Property Bee: go to Property-Bee and click the ‘download’ button on the left and follow the prompts. Next time you search for properties on any of the linked agents, any alterations in prices and details will appear as if by magic.

Free Property Valuation

Here’s a guide to some of the best:

What Price are Houses on your Street Fetching?

Don’t, whatever you do, make the mistake of going to a website that charges you for this information when you can get it for free! Instead, go to any of the following sites and key in your postcode or the name of a street you’re interested in, et voila, you will see what houses in that area are currently going for. Oh, and your neighbour’s house, the one that sold last week, won’t appear for about three months…

A word to the wise about getting excited when you see the prices for houses in your street in the local estate agents’ windows – these prices are set with a margin for ‘knocking down;’ asking prices are rarely achieved.

How to Find Properties that have Dropped the Asking Price