Following a 2 year episode of stagnation with residential property sale transactions down by as much as 50% at times, there is at the moment a constrained demand amongst residential property purchasers. What’s more lots of potential first time purchasers have had their ambitions thwarted and now recognise that property has become very good value due to around 25% value drops. Lastly, government forecasts of the need for an extra 120,000 properties per annum to be built have not disappeared. All these factors seem to suggest an imminent resurgence in the residential property market and suggest that an early return to 2007 transaction numbers of around a million per annum should be possible even in the short term.

What currently seems to be holding back this improvement is the non-availability of mortgage finance, especially for first time purchasers. Mortgage approvals are on the increase month on month but are still at levels appreciably below the mid 2007 levels. This appears to be more to do with supply rather than demand as the financial institutions continue to open up their lending to residential property buyers with some caution. The banks have to lend to make profits and it is profit which will best repair their balance sheets, but it is vital that they lend prudently, it is widely held that their lack of care in residential property lending was a principal cause of the downturn in the first place. A Quick Home Sale is still possible if the seller prices the residential property sensibly and the buyer has funds in place to complete the transaction.

Income multiples and lender assessment and credit scoring criteria seem to be set to return to an earlier time of caution and the availability of non status loans or impaired credit loans will be seriously restricted. Financial Institutions will carefully increase their lending in the residential property market but it will be only those with real affordability who will benefit from such mortgages. This situation has recently created a demand for “Sell House Fast” Companies who purchase properties extremely rapidly indeed, but at below market value, using their own funds.

The impact of all this will be a steady increase in residential property transaction numbers over the coming months. However buyers will be limited on affordability by more prudent income multiples and will need to continue to bargain hard for the residential property they dream of. Sellers will have to accept, especially if they want to Sell Property Fast, the reality that their residential property is now worth 25% less than 2 years ago, but they will gain by getting their next residential property at a similar discount.

So the merry go round of residential property transactions will continue and the mortgage market will definitely prove to be the main inhibitor on residential property prices in the coming months and years. In time to come the past 2 years of tumbling residential property prices will become to be seen as an essential market correction brought about by a return to more cautious lending standards. In the meantime a steady rise in residential property prices can now confidently be predicted.

Recent Entries

• iPad 3 Features For Marketing Real Estate Properties
• Construction Equipment For Your Building Project
• Three Tricks for Leasing Commercial House
• Why A Good Realtor Can Help You Generate Profits
• Frequent Mistakes to Avoid when Building a House
• Top Moving firm Can Assist Your Moving
• Five Excellent Advantages You Get When Owning a Condominium
• Moving The Household Can Be Less Problematic
• How You Can Keep Clear Of Moving Day Depression And Anxiety
• Why It Really Is Essential To Get A Boiler Service For Your Home

This entry was posted on Tuesday, July 7th, 2009 at 1:54 pm and is filed under Home Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.