Falling house prices close the gap between the bottom rungs of the ladder, but the leap to a four bed home gets bigger
It is now easier to make the leap from a one bedroom house to a two bedroom house than any other time in the last five years, according to the latest research from propertyfinder.com. People looking to trade up from a one bedroom home will now only have to find an extra £31,000, versus £41,500 a year ago.This is because the value of two bedroom homes has fallen faster than any other homes. The average price of a two bedroom property has fallen by 12% from 2007 to 2008, while the value of one bedroom homes has fallen only 8%, so the financial leap to move up the ladder has decreased by 26%.
It has also become cheaper to trade up from a two bed home to a three bed, with the average price of a third bedroom falling 12% from £66,264 in 2007 to £58,436 in December 2008.
However, despite falling house prices, the price of a fourth bedroom has increased by £9,502 in the last 12 months, because the value of smaller houses has fallen at a faster rate. The average price of a four bedroom home has fallen from £390,343 to £370,276 - a drop of over £20,000. But because the price of three bed homes are falling faster, the premium to move to a four bedroom home has increased from £141,733 in 2007 to £151,235 at the end of 2008.
Nicholas Leeming, director of propertyfinder.com, explained: 'The real catalyst for house price falls has been a lack of mortgage availability, particularly for less credit-worthy borrowers. This means the bottom end of the market has been more impacted by the slow down and prices there have fallen more rapidly. Young families at the bottom end of the ladder will now find it easier in cash terms to trade up than they have for quite some time, and as mortgage availability frees up towards the second half of 2009, more people will be able to take advantage of a market which now offers good value. People are coming to terms with economic gloom and realising that life goes on - some people still need to move, particularly those who need more space for growing families - and this is actually the perfect time for them to trade up.
Home owners with a large amount of equity in their property should find it easier to get mortgages and be able to move sooner than those without lots of equity or large deposits. People higher up the ladder will naturally find it easier to gain access to finance in order to move, but because of this the price of four bed properties has only fallen 5%, compared to around 12% for two and three beds, so the financial gap has actually widened.'
Buyers showing renewed interest in property
The property market has experienced a promising start to the New Year, according to County Homesearch, which has seen a greatly increased number of potential buyers registering for its services in the first two weeks of January 2009.Reinforcing the findings of the Royal Institution of Chartered Surveyors who report that "buying interest is now at levels not seen since 2006", County Homesearch managing director Jonathan Haward said that UK residential housing was now seen as something of a bargain for anyone earning dollars or euros.
"As well as indigenous interest, we have also witnessed a substantial increase in registrations from buyers across the world. With discounts of up to 40% on some property due to last year's price falls and some lenders offering best-buy mortgage rates of below 4%, UK house prices currently look like a bargain to foreign buyers.
"We have quite definitely seen an increase in buyer inquiries and as we are right at the sharp end of any housing market transactions we predict continued growth in buyer activity.
"Those buyers who have no need of a mortgage can rely on us to negotiate some very real bargains and even if house prices dip by another 5%-10% we can see some excellent house price growth starting in 2010. In five years time today's buyer will be sitting on a substantial profit.
"Just as when Marks & Spencer have a 40% sale everybody is interested, potential buyers with cash in hand should be out to grab a property bargain," continues Haward.
We have given it all away when it comes to manufacturing.
All we have left is the corrupt money launderers in Canary wharf and the likes of.
Can you find anything in the shops or online that is made in the UK? Try EBAY for a laugh.
Houses and anything else will be worthless until the balance is corrected. Not in my lifetime!!
Now, as previously, there has to be a major readjustment and, just as before, the only losers are the ordinary people with massive negative equity and an impossible debt.
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