LITTLE CHANCE OF A SPRING PICK-ME-UP FOR PROPERTY MARKET

The Halifax says region recording house price rises in the first quarter of 2008 included Greater London (1.6 per cent); East Anglia (1.4 per cent) and East Midlands (2.2 per cent).

Biggest falls were in West Midlands (-5.0 per cent), Wales (-4.7 per cent) and South-West England (-2.6 per cent).

From a base rate of 100 in 1983, the Halifax House Price Index hit an all-time high of 646 in August, when the average house price was just shy of £200,000 - at £199,600.

By March, it had rolled back to 620, with house prices averaging £191,556.

Henry Pryor, founder of online property aggregator Primemove, says the big lenders have masked problems in the market for months by statistical reports which claimed house prices were still rising.

Pryor says: "It does a huge disservice to the sellers and the rest of the market when those responsible for funding house purchase not only deny the scale of the problem, but compound it by withdrawing their products, so that even if somebody finds something they want to buy, they find that some banks don't have a single mortgage product to sell!

"Lenders say they are withdrawing products because they don't want to provide a poor service to customers. I hope our new nationalised bank (Northern Rock) that has already directly cost taxpayers £24bn will see an opportunity and start to help people who want to buy, but can't get a mortgage."

Pryor is being sarcastic - Northern Rock is telling its borrowers they will soon be sent elsewhere for more expensive loans.

Another worrying sign is Pryor's analysis of over 18,500 homes put on sale since the Northern Rock crisis blew up last August. He claims just 20 per cent of this total have been sold or withdrawn from the market, while 80 per cent remain on sale.

If those calculations are anything like accurate, thousands of sellers paying upwards of £400 for Home Information Packs (HIPs) are in danger of losing their money - without getting a buyer. After six months on the market, HIPs must be compiled again, requiring more expense.

The big question is where the market goes from here.

Halifax predicts "a modest, low single-digit decline in house prices this year... which needs to be viewed in the context of significant price rises over recent years".

Says Ray Boulger, senior technical manager at mortgage brokers John Charcol: "Don't put too much weight on one month's figure from Halifax, which has a history of being volatile with this survey.

"It claimed prices rose 1.4 per cent in December, and not many people were able to believe that either.

"Its figures are also doctored on a seasonally adjusted basis - but seasons are almost irrelevant in this market, which is affected more by interest rates and the credit crunch.

"When Nationwide BS reported a 0.6 per cent fall for March, it admitted the actual fall in prices, before economists made the seasonal adjustment, was only 0.1 per cent."

Says Boulger: "The big difference between today and 1992 is that we have the power to set our own interest rates, whilst in 1992 we were stuck in the ERM and Europe decided what we did. The worse the economy gets, the more we will see rates fall.

"I expect to see house prices down by about five per cent in December 2008, against December 2007. Things will get better in 2009, but possibly not in the first quarter."

Boulger says anybody keen to buy should continue to check out properties and get a feel for prices.

"Put in cheeky offers", he says, "and you might be surprised to find one accepted. If you don't expect prices to fall more than 10 per cent, keep looking and taking your time."

Says Rob Bruce, research manager at leading Southern England agents Hamptons International: "We predicted rises of 2-3 per cent for 2008 at the start of the year, but the reality of the market has changed somewhat and our current estimate is zero per cent.

"We need to remember that demand to buy is still quite strong, with applicant numbers up year-on-year in many of our offices and the lettings market thriving. It all depends on how quickly credit markets can recover."

Says Richard Donnell, director of research at property market data specialist Hometrack: "The market is clearly weak, and most people accept their house is not worth as much this year as last.

"But it's hardly Armageddon. We will expect to see small falls during the next quarter, and things might flatten out in the second half of the year when it becomes clearer that problems are levelling out in the US economy and US housing market.

"Even if house prices fall 10 per cent, that only takes us back to price levels of 2006. I don't see double-digit falls, although we are forecasting real house price falls over the next two years."

Says Liam Bailey, head of residential research at agents Knight Frank: ""We ought to remember there are not many forced sellers in the market at present. If people can't get the price they want, they tend to take their home off the market.

"So many potential sales are simply not happening, and I believe the number of sales in 2008 will be 20-30 per cent down on 2007.

"This in itself need not weaken prices further. I expect things to improve slightly in the mortgage market in the second quarter of the year, and when that happens, the market will improve slightly.

"I expect a general price fall for the year of about five per cent by Christmas 2008, but price falls could exceed that if problems continue in the credit markets."

At the National Association of Estate Agents, Bolton King says: "Keep the Halifax figures in perspective: its report says prices have fallen five per cent in the West Midlands, but they have increased by 150 per cent in the last 10 years.

"Likewise in Wales, a drop of 4.7 per cent should be seen against a backdrop of a rise of 188 per cent in the last 10 years."

:: LANDLORDS WILL SIT OUT THE CRUNCH, AGENT PREDICTS

With the new, reduced level of Capital Gains Tax (CGT) at 18 per cent coming into effect from April 6, it has been widely expected that many buy to let landlords - currently sitting on mortgages worth a total £122bn - will sell up to take their profits.

Even the landlords' own trade association, The Association of Residential Lettings Agent (ARLA), has admitted sales are likely. It claimed one in five buy-to-let investors could sell part or all of their portfolios over the next year, a 31 per cent rise on the figure of three months ago.

But according to Ludlow Thompson, the sell-off is unlikely to happen in present circumstances - partly because many landlords expect a surge of rental demand in the next few months as it becomes increasingly difficult to buy.

The agency's survey claims that only one per cent of buy-to-let investors are likely to take early advantage of the lower CGT rate by selling up. Almost 40 per cent of investors that have no intention of selling, and 37 per cent say CGT changes might even encourage them to buy more properties.

Says Ludlow Thompson director Stephen Ludlow: "Most investors take a very long-term view of their investments, and do not enter this market for short term capital gains."

Landlords might also think that trying to sell up during 2008 looks a sign of weakness: vultures are already on the lookout for distressed sellers, and offers are being pitched lower as media coverage backs up the general impression of a market in difficulties.

:: ENERGY CERTIFICATES (EPCs) ARE HARD WORK

From April 6, all new homes are required by law to have Energy Performance Certificates - in line with the rest of the market where second-hand homes require an EPC within their Home Information Packs.

David Bexon, managing director of new homes website www.SmartNewHomes.com, says: "The EPC will include an environmental rating which measures the property's impact on the environment in terms of CO2 emissions

"New home buyers will receive a certificate outlining the energy rating of a new home, graded A-E with an A rating suggesting lower emissions.

"When new homes are bought off plan, they will get a Predicted Energy Assessment (PEA)."

Bexon says recent research suggests a new home could save a household £556 a year in energy bills and cut CO2 emissions by more than 60 per cent by employing the latest energy-saving techniques.

However, a report in Building magazine suggests that newly-qualified energy inspectors who produce EPCs might not be enjoying the return which many expected when they undertook training courses costing between £3,000 and £5,000.

Quoting Government figures, Building magazine reckons that many energy assessors could see their average income drop to £8,000 as year as more assessors qualify. There were nearly 6,500 registered energy assessors in late January 2008, and the estimated earning per EPC is only £30-45.

Building says the average income is a far cry from the £50,000-80,000 that some training companies were promising at the beginning of the year.

Problems for these energy experts could get worse; the number of house sales is likely to fall for the rest of the year, while the number of qualified assessors by Christmas is likely to be around 11,000.