This month has seen more positive news emerging from the UK property market. Consensus across the market seems to suggest we’re at the bottom now. There’s no consensus, however, on how long the bottom will last but activity levels are still climbing on the high street. On an anecdotal level I’ve seen remortgage valuations (i.e. valuations of properties for the purpose of remortgage) come in between 10 to 15% above the well known national index values those same houses. From where I am sitting that’s a clear lead indicator that that indexes are lagging activity on the street and we will soon see new price levels reflected in the indexes.
Mortgage product pricing is still steep but we’ve seen the first few signs of a little pricing competition (albeit at the lower end of the LTV range). The pricing matrix shows very similar pricing to last month and no real change at the 85% – 95% range which is the one we’re all watching. Currently these mortgage rates are very real deterrents to first time buyers.
The good news is this month we’ve seen 2 new foreign banks enter the UK market. This should provide the much needed competitive stimulus that could hopefully be the beginning of a slow migration back to a healthy and competitive banking system.
Pricing Matrix as at 04/08/09
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