THE housing market is experiencing its slowest rate of growth for more than a decade and concerns over the economy have led the former Iron Chancellor Gordon Brown to state that it's his number one priority.
We look at the property market in East Lancashire and what it means for buyers, sellers and estate agents.
FOR many homeowners and sellers in East Lancashire house price figures from the last quarter of 2007 make grim reading.
The last three months of the year saw house prices in half of area's boroughs drop significantly, the sharpest decline since the mid-1990s.
In the Ribble Valley average prices fell by 7.1 per cent to £226,660, in Hyndburn they dipped by 4.1 per cent to £110,323 and in Pendle the price has levelled at £117,239, a decline of 2.6 per cent.
And even though in Rossendale prices increased by 10.6 per cent, in Burnley by 4.8 per cent and in Blackburn with Darwen by 3.4 per cent, the picture nationally shows a slow down with some experts predicting a drop of 10 per cent before the slump is over.
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Prime Minister Gordon Brown said the UK was feeling the impact of the global credit crunch, a phrase that seems to obtain a greater resonance as the year goes on.
For East Lancashire property experts the bleak picture being painted by many is only contributing to the sense of gloom, when more positive thinking could produce a more buoyant situation.
Ian Bythell, partner at HW Petty and Co estate agents, which is part of the Home Sale Network and has offices in Burnley, Nelson, Barrowford and Colne, believes the financial climate means a dose of realism is needed for many.
He said: "There is a downturn in the market at the moment, both nationally and locally.
"The lending policies of the banks are partly to blame because young buyers cannot get their hands on the deposits they need for houses which is not allowing people to sell. It's jamming up the system.
"We saw signs of it last year and it is a situation similar to that of the 1990s, even though we've had 10 years of growth.
"I think the slump will continue for the rest of the year and maybe much longer.
"I believe that the concerns over housing are creating a downturn in the whole economy because if people are concerned about spending on their house it has a knock-on effect.
"People love property in this country - thanks to the Margaret Thatcher era - and if there are worries about that it effects everything.
"It is a time for realism because it is becoming tougher to shift houses. There are buyers out there, just not as many."
Such was the concern over the economy and the state of the housing market that the Bank of England dropped interest rates to five per cent in an attempt to stabilise things.
However, Mr Bythell is not the only one yet to see the benefits of this fall.
Nick Hall, of Acorn Independent Financial Management, Blakewater Road, Blackburn, claims the credit squeeze was affecting existing borrowers and those who wished to go up the property ladder as well.
He said: "There remains an air of distrust between banks as no one really knows how exposed to the sub prime problem the various banks are, so what has happened is that the banks and building societies have stopped lending to each other.
"As the Bank of England rate improves then the banks and building societies are pocketing more margin as they are not passing on the rate cuts to their customers.
"Customers who used to be able to find 125 per cent and 100 per cent mortgages can no longer find them, products are continually being reviewed and withdrawn with lenders changing criteria even when customers have been accepted.
"Valuers and surveyors who are instructed by the lender to value property for the bank to lend against are now valuing property lower on the instruction of the now risk-cautious lenders.
"With such uncertainty many people are waiting to see what will happen, they are choosing to stay rather than move on and take on more debt.
"With fixed rate deals coming to an end remortgaging is in huge demand."
Simon Ainsworth, head of the residential property department at Napthens solicitors, Blackburn, claims there has been a noticeable downturn in the residential property industry, partly because there is so much negativity surrounding the market. He said Napthens had noticed that mortgage offers were being pulled as well, with some clients who have had mortgage offers having them pulled even after they have exchanged contracts on a property.
He added: "Lending criteria is stiffer, interest rates are higher and prices don't seem to be going down. That is leading to first time buyers not being able to get on the property ladder.
"I think the improvement will come if sellers of properties become more realistic on prices.
"In Blackburn sellers are starting to accept offers which are less than the asking price.
"If they are more realistic then more sales will start to go through and the market will pick up."
About a year ago my eldest daughter said: "Dad, I'll never be bale to get onto the property ladder".
My response was, stop right there. We do not use the word 'property ladder'. You buy a house to make a home - a place of love and security.
The only people who use the term 'property ladder' are those with a vested interest in the property market (developers, estate agents, lenders and solicitors) and clueless, dozy politicians (of which there is no shortage).
All of these people want you to pay a high price for property. Those with a vested interest want this because you make them rich, and politicians because once you are in debt you will be a docile, subservient serf to the elites. You will have exchanged your freedom and liberty for a life of slavery.
Don't do it.
Now here's the good news. The property market in cyclical, and through the last ten year's we have lived through a credit boom unprecedented in history. All credit booms end in disaster - every one, period. This one will be no exception.
Calamity Brown and Captain Darling can't single-handedly hold up the market - though they will try because the 'miracle' economy has to a large extent been built on people trading property at ever higher prices. Those who got in early and got out in good time have been made rich beyond their wildest dreams, hoseholders who stayed put are no richer or poorer because prices are higher but many of those who came late to the party will be ruined.
As a first time buyer the rule is never buy at the top, once you own a house when you buy and sell is largely irrelevant because the rest of the market (or most of it) will be moving in the same direction. If you wish to exit the market the trick is to sell at the top.
Sit back, I said, and watch the spectacle of the credit boom implode. There are plnety of other asset classes that have performed as well or better than property, and without the drawbacks (costs of maintenance and lacl of liquidity in a downturn).
My final advice to her was: take no notice of those with a vested interest in the market and on no account listen to the politcians, other than to lauigh at them.
About a year ago my eldest daughter said: "Dad, I'll never be bale to get onto the property ladder".
My response was, stop right there. We do not use the word 'property ladder'. You buy a house to make a home - a place of love and security.
The only people who use the term 'property ladder' are those with a vested interest in the property market (developers, estate agents, lenders and solicitors) and clueless, dozy politicians (of which there is no shortage).
All of these people want you to pay a high price for property. Those with a vested interest want this because you make them rich, and politicians because once you are in debt you will be a docile, subservient serf to the elites. You will have exchanged your freedom and liberty for a life of slavery.
Don't do it.
Now here's the good news. The property market in cyclical, and through the last ten year's we have lived through a credit boom unprecedented in history. All credit booms end in disaster - every one, period. This one will be no exception.
Calamity Brown and Captain Darling can't single-handedly hold up the market - though they will try because the 'miracle' economy has to a large extent been built on people trading property at ever higher prices. Those who got in early and got out in good time have been made rich beyond their wildest dreams, hoseholders who stayed put are no richer or poorer because prices are higher but many of those who came late to the party will be ruined.
As a first time buyer the rule is never buy at the top, once you own a house when you buy and sell is largely irrelevant because the rest of the market (or most of it) will be moving in the same direction. If you wish to exit the market the trick is to sell at the top.
Sit back, I said, and watch the spectacle of the credit boom implode. There are plnety of other asset classes that have performed as well or better than property, and without the drawbacks (costs of maintenance and lacl of liquidity in a downturn).
My final advice to her was: take no notice of those with a vested interest in the market and on no account listen to the politcians, other than to lauigh at them.
like you kevin, i too think when you buy a house you should see it as your home and not something to make you money. if it goes up in value then thats an added bonus, if it goes back down then hey ho,youve not lost anything. as you say,its a place of love and security for your family
like you kevin, i too think when you buy a house you should see it as your home and not something to make you money. if it goes up in value then thats an added bonus, if it goes back down then hey ho,youve not lost anything. as you say,its a place of love and security for your family
i think its about time that properties prices should come down signifcantly.
the only people that should crying are the estate agent, who have made fortunes for them self.
i think its about time that properties prices should come down signifcantly.
the only people that should crying are the estate agent, who have made fortunes for them self.
Posted by: Steve., Ramsbottom on 10:17am Tue 22 Apr 08
Prices of the most modest houses are getting behond the reach of many people.Not many years ago most people could hope to buy a terraced house.When a little wealthier they could move to a semi or detached house.
Rapid house inflation has destroyed this.
House inflation surely has been driven by a series of factors-a lack of new social housing,more people chosing to live alone,the buy to let brigade,and irresponsible lenders offering 100% or in some cases 125% mortgages.
In my opinion house prices should drop to a more realistic level.
Most people want a place to call home.A place where they can shut out the world,where they can bring up a family and feel secure.surely in Britain 2008 that isn't asking to much?
Prices of the most modest houses are getting behond the reach of many people.Not many years ago most people could hope to buy a terraced house.When a little wealthier they could move to a semi or detached house.
Rapid house inflation has destroyed this.
House inflation surely has been driven by a series of factors-a lack of new social housing,more people chosing to live alone,the buy to let brigade,and irresponsible lenders offering 100% or in some cases 125% mortgages.
In my opinion house prices should drop to a more realistic level.
Most people want a place to call home.A place where they can shut out the world,where they can bring up a family and feel secure.surely in Britain 2008 that isn't asking to much?
Posted by: Martin, Rishton on 12:31pm Tue 22 Apr 08
I bought an home in a supposedly down an out street, very cheaply about two years ago... £50K.. so far its been a nice place to live, quiet with access to green areas etc. In 5 years it will still be worth more than 50K to me.. maybe a lot more to someone else, who cares. People have miles more free cash than they think.. people just take luxeries for granted.
I bought an home in a supposedly down an out street, very cheaply about two years ago... £50K.. so far its been a nice place to live, quiet with access to green areas etc. In 5 years it will still be worth more than 50K to me.. maybe a lot more to someone else, who cares. People have miles more free cash than they think.. people just take luxeries for granted.
Kevin, what an absolutely brilliant post, Spot on. Martin, hopefully now, more people will begin to think like you in the future. 50k to live in Rishton? A Bargain.
Kevin, what an absolutely brilliant post, Spot on. Martin, hopefully now, more people will begin to think like you in the future. 50k to live in Rishton? A Bargain.
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