The housing market is showing signs of stabilising, albeit at very low levels, with average sales up slightly in March and a smaller majority of estate agents still reporting falling prices, according to a leading survey.
The monthly findings from the Royal Institution of Chartered Surveyors show that the number of property sales per surveying agency stopped falling in March, with the average in the three months to March standing at 9.7, compared with 9.6 in the three months to February.
Banks have begun to ease their ban on homeowners who borrowed more than the value of their property, in a sign that lending criteria may be beginning to ease.
For the first time in more than a year, HBOS part of Lloyds Banking Group, is offering to lend homeowners 100 per cent mortgages.
source: www.ft.com/uk
The Bank of England’s monetary policy committee agreed on Thursday to hold interest rates steady for the first time since last September and maintained its commitment to buy up to £150bn in gilts and corporate bonds.
The decision to keep interest rates at 0.5 per cent was widely expected, after rates had been cut by a total of 4.5 percentage points in the six meetings of the MPC since September.
The move comes amid fears that further rate cuts would hit banks’ spreads and profitability, which could affect their ability to lend, and that they might not be passed on.
The committee also agreed to continue with the programme of quantitative easing – creating central bank reserves mainly to buy up gilts – that it began after the last meeting.
The Bank of England
Source: www.ft.com
Michael Coogan of the UK Council of Mortgage Lenders gave an interesting interview on BBC Radio 4’s Today programme this morning about the welcome signs of life in the UK mortgage market.
Essentially HSBC has cut mortgage rates; and there now seems to be a willingness from an increasing number of lenders to increase their loan to values. Announcements have been made by Northern Rock, Lloyds, RBS and HSBC. HSBC has made £1bn available for first time buyers.
Listen to the interview here:
The pound’s slide against the euro has begun to trigger concerns on the continent that the UK is seeking to gain a competitive advantage over its European Union partners.
Sterling has fallen by more than 25 per cent on a trade-weighted basis since the autumn of 2007, raising the question as to whether Britain is letting its currency fall to help its exporters at a time when the eurozone is falling more deeply into recession.
Brian Lenihan, the Irish finance minister, in January directly accused the UK of running a policy of “competitive devaluation”, putting other countries under “immense pressure”.
As the pound has stabilised a little in recent months, the Bank of England now sees the benefits of a lower currency, not in rising exports but in a rapid fall in imports contributing positively to economic growth.
Source: www.ft.com
Brian Lenihan the finance minister delivered the toughest budget in the history of the state. The main points include:
– €3 billion in tax rises and spending cuts
– Doubling the income and health levies
– Cutting child benefit
Typically a person earning €100,000 per annum will pay an extra €333 per month into the governments coffers.
In other news Moody’s increased its expectation of losses on Irish bank loan portfolios due to continued deterioration in real estate prices, the likelihood of more corporate defaults and the erosion in residential loan performance.
Straightened times indeeed.
The New York Times has run a sensationalist piece on the sudden economic implosion in Ireland. This comes on the back of the Sean Dunne expose back in Janaury and ahead of todays emergency budget announcement.
Similarily BBC Radio 4’s venerable Today programme ran a feature this morning on the perceived pitiful economic situation in Ireland.
Added to this was the recent Sunday Times magazine feature on Ireland’s beleagured economy.
There seems to be a sense of schadenfreude to the current international coverage. Just how accurate is all this doom-filled commentary? Does the irish media have a riposte?
Sensationalist Schadenfreude?
Links: www.nytimes.com, www.bbc.co.uk/radio4 & www.sundaytimes.co.uk
THE EUROPEAN Central Bank (ECB) surprised financial markets by cutting its main interest rate by a smaller than expected 25 basis points yesterday to a new low of 1.25 per cent, triggering a sharp rise in the euro.
– House prices increased by 0.9% in March
– House purchase activity reaches highest level since May 2008
– Welcome signals of market improvement but too early to talk of house price recovery
House prices rose in March for the first time since October 2007, according to the Nationwide.
The building society said that property prices increased by 0.9% compared with the previous month.
That reduced the annual rate of house price falls from 17.6% in February to 15.7% in March, with the average UK home costing £150,946.
Nationwide described the change as a “surprise bounce” and warned against concluding the market had turned.
Source: Nationwide Building Society
Link: http://tinyurl.com/clqvu9
Work is well underway on this huge development being built by London-Irish developer Eamon Lyons. It is located on Old Street on the edge of London’s financial district – The City. It is due for completion in 2010. The development comprises of two 14 and 16-storey towers.
Eamon Lyons has over 20 years experience in the East End. Originally from the west of Ireland, Lyons cut his teeth with Sean Mulryan’s Ballymore Homes in the late 1980s and early 1990s but eventually established his own company, Tudorvale Homes, which has been building houses and apartments for over a decade.
Artists impression of the finished development