Property Market Predictions 2009

The number of property transactions completing in 2007 amounted to approximately 1.2 million. This figure was halved to 600,000 in 2008. We predict that the property market will remain much the same in 2009 with over 10% of property transactions being repossessions.

The future success of the property market will be largely dependent upon the availability of mortgage finance and mortgage lender loan to value requirements.
In the event that the government would like to stimulate the property market and stop property prices falling they may wish to consider the following options:-

1. The nationally owned Northern Rock Bank can be used to provide mortgage
funding at competitive interest rates with good loan to value products. The
government are constantly providing loans to other banks and then complaining
that they don’t pass the benefit of those loans on to their customers. They
own one of the most prolific mortgage lending institutions of the last decade.

2. A genuinely effective Stamp Duty holiday would help to stimulate the market.
The Government may wish to consider a zero tariff up to £250,000
and a tariff of 1% thereafter. This would have a massive impact on the property
market.

3. Home Information Packs should be abolished. These documents are expensive
at the start of the transaction and offer little in terms of helping the legal process.
By abolishing the Home Information Packs the government will stimulate more
properties coming on the market. Additional choice will lead to a greater number
of transactions completing.

4. The government may wish to consider first time buyer deposit loans. First time
buyers often find it difficult to raise deposits especially given the loan to value
ratios required by mortgage lenders. Additional deposit funding would certainly
stimulate the housing market.

The government have already reduced interest rates, albeit very late in the day.
Interest rate reductions will help insofar as they may stimulate savers to make
long term investments in property as opposed to receiving small interest payment returns on their savings. The reduction in interest rates will also stimulate the buy to let market with Landlords once again being able to make a profit from letting their properties as a result of the low interest rates.

The Government need to react if we are to see an increase in the number of
transactions completing throughout the course of next year.

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