Property-Match (UK): the modern way to market houses

For more information about how runaway house prices blight the housing market, in approx. 10 yearly cycles, please go to:
The Housing Economy as part of the UK Economy

This is a detailed analysis of why the latest house price bubble boomed before it burst in 2007/8 and what should be done to bring supply and demand, within the housing sector back to balance, providing vital stability.

Note:

We'd be grateful if you would you kindly inform us when publishing or broadcasting information contained either within this press release, or in our detailed analysis, so that we are afforded an appropriate opportunity to respond.

For more information:

Contact:         Peter Hendry, Website Manager

Company:      Property-Match (UK)

Address:        48 Marshall Hill Drive,

                       NOTTINGHAM, NG3 6FS

Email:             frpr@property-match.co.uk

Phone:            0115 840 2982

Mobile:            07792 334547

Website:          http://www.property-match.co.uk/

What you're about to read isn't just a rant about house prices but a considered analysis by a qualified property valuer instead.

Its not enough for our leaders to stimulate the supply-side, by encouraging more houses to be built whilst leaving the demand-side to its own devices.  Volatile house prices and great uncertainty have resulted from this approach in successive cycles.  Its now been proved beyond doubt that leaving the market to regulate itself when it is rising simply doesn’t work.  Neither can it work in a falling market.  It is vital to address the demand-side problem by putting in place a solid framework of lending criteria which banks and building societies must be made to adhere to. Its folly to stimulate increased prices on the back of increasing borrowings.  Prices are already too high to be sustained by average earnings currently.

The measures we propose are a three point plan and one that would not involve getting the country into more debt.

Firstly: regulate loans for house purchase by setting maximum loan-to-value limits.  This would help to spread available cash more evenly, stopping the wealthiest people from taking the lion's share of available mortgage funds (whilst bidding up house prices in the process).  The problem with excessive loan-value ratios is that these cause house price increases.

Mortgage valuers would need additional training to be able to check that the set limits are not exceeded but that could easily be accomplished.

For the avoidance of doubt, mortgage valuers do not control house values, they simply catalogue their levels at any moment in time.  In doing this they should check loan-to-value limits as part of the valuation process, but this does not happen at present.

Second: maximum loan-income limits need to be set based on a defined multiplier of current income.  Everyone needs to be subject to this check and all lenders should be expected to comply with it.  This way people would be stopped from over-reaching themselves with debt.  Setting these would also help to spread available loans more fairly. Banks and Building Societies should be made responsible for this.

Thirdly: we must stop paying estate agents a percentage.  This would stop, at a stroke, misinformation, double-dealing and false valuations which are prevalent in the present housing market.

A cool, calm and collected debate is warranted on this issue amongst all those responsible - right now.

These measures would bring the needed stabilization to house prices, keeping them at genuinely affordable levels.

The best time to introduce these measures is whilst the housing market is tending to stagnation - Thats now.

Not to apply such measures would allow inflation back into the housing market, which is the last thing the country needs right now.

No-one enjoys the hassle of wild swings in the property market when the rest of the economy is also suffering.

We are the worst in Europe for this because the rest of Europe tends to be rather more circumspect about their borrowing levels.

Therefore it is high time that responsible action is taken by politicians to bring into effect, not only the moderation of banks' lending policies but, as importantly, much improved marketing methods for estate agents, centred around more accurate house valuations.

The result would be that builders would be able to carry on building, as their products could be sold at prices they would be able to forecast, even in a recession.

Even more importantly, with greater stability of house prices, more people would come back into the market, wanting to risk a move and having the confidence to buy, without the risk of negative equity and looming financial loss.

This is the the really clever bit:  By putting these measures into place, more stability of house prices would result. It would come from the increased activity in the market brought about merely by implementing these measures.

Any estate agent worth their salt will tell you, that doing nothing will simply allow the old boom and bust scenario to continue - just as before.

Looking at the state of the market right now, there are far too few transactions taking place to satisfy most people’s actual needs.  Its really no wonder hardly anyone dares to try moving with the present uncertainly cloaking the housing market (unless they are forced to move by one of the 4 D's).

After all, who wants booms and busts on top of having to negotiate death, divorce, debt and the extra distance of travel to work, whilst trying to move house to stay in work.

What people really need is fair play in agent’s dealings.  If that new phenomenon was introduced, it would kick-start the housing market and be a ground-breaking release for the market.

A stable housing market would be a first and therefore is a responsible thing for any new government to adopt.

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Copyright © 2010 Property-Match (UK) all rights reserved

Press release: Updated: August 2010, Nottingham, UK

FOR IMMEDIATE RELEASE

The Headline:

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HOW TO RE-ESTABLISH THE HOUSING MARKET

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