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On the up again?
New figures out this week showed a promising rise in property prices, the latest in a string of statistics which could represent green shoots for a boom sector of the Leeds economy. But do they translate into a real upturn for those working on the ground in the housing market? Rod McPhee reports.
THE old adage about damned lies and statistics may apply in so many areas of life but it seems that, in terms of the housing market, they may actually speak the truth.
Just a few days ago the latest in a string of positive reports revealed that the value of properties nationally had risen by 0.9 per cent – a modest but positive step in an upward direction.
Furthermore the figures, released by Nationwide, showed that the fall in value last month compared to the same time in 2008 was 9.3 per cent, one of the narrowest gaps in months.
So does it amount to good news? After all, similar statistics by the Halifax and the Council of Mortgage Lenders also seem to be indicating steady growth and an increase in lending.
Or is it simply a blip which bears no relation to what's really happening in the market?
Paul Lehan is one of the directors of Castlehill Estate Agents in Headingley. He's convinced it is the start of a continued upward trend rather than a peak in the middle of a trough.
He said: "We feel we've already passed the point of hitting rock bottom – that was probably the end of 2008 and since the new year things have gradually, slowly got better.
"One of the biggest problems was actually a shortage of supply of good quality, reasonably priced properties to meet a big demand. But whereas last year people seemed just too scared to enter the housing market this year more and more people are feeling more confident.
"The feeling is that the shrinking supply has helped push prices up and is making people feel, quite rightly, that if they put the right property on at the right price that they now stand a very good chance of selling it.
"There are, however, still worrying issues around securing mortgages and I think that although the housing market is actually fairing better than the economy as a whole, the improvements will continue, but be very gradual."
Mortgages remain one of the biggest hurdles facing those wishing to buy and sell properties because lenders not only have limited resources but are also wary about taking on all but the safest of borrowers. But even here local experts are seeing green shoots.
Peter Clarkson is a specialist mortgage adviser in Leeds. Over the past year he's seen a substantial improvement in the terms offered by lenders and an increase in the numbers of people having their applications approved.
"It's still very hard work," he says. "But not as difficult as it was in 2008 when the 100 per cent mortgages disappeared and lenders started drastically tightening the criteria for applicants.
"The biggest hurdle was deposits because even just six months ago getting a good deal meant finding a deposit of 40 per cent - well now that's come down to, on average, about 25 per cent.
"There are even some deals around for around 15 per cent though they are harder to come by.
"That's a major key to an upturn in the market because even a young professional coming into the market on a wage of, say, 25-28,000, might be able to afford a mortgage of anywhere between 110-140,000, but finding such a huge chunk of that upfront can be very difficult.
"If that percentage for a deposit keeps falling it could drastically improve the situation, though when the market as a whole will fully recover is almost impossible to guess."
And it's about more than maintaining prosperity within the small bubble of Leeds.
Those with their fingers on the pulse of the market know that properties across Yorkshire are partly measured against the yardstick of its regional capital.
Richard Green, residential sales partner at Halifax-based Brearley Greens Estate Agents, said: "We keep a very close eye on the Leeds housing market because it's a useful measure of the state of affairs regionally.
"During the last period of growth so much of the wealth creation came from service industries and that emanated from regional capitals like Leeds, so much so that places like Halifax have almost become suburbs of Leeds, in certain respects.
"If good things happen in the Leeds housing market it's good for other parts of Yorkshire on many levels. Simple wealth creation does ripple out but also the comparative expense of buying in Leeds meant that many more people saw places like Halifax as being more affordable and commutable.
"So it's actually in our interests for Leeds to be economically buoyant and for the housing market there to remain at a high level.
"Unfortunately at the moment things seem to be staying fairly constant but there's already one or two seeds of recovery being sown and I think next year you'll see a real difference."
“That’s a major key to an upturn in the market because even a young professional coming into the market on a wage of, say, 25-28,000 might be able to afford a mortgage of anywhere between 110-140,000, but finding such a huge chunk of that upfront can be very difficult.
“If that percentage for a deposit keeps falling it could drastically improve the situation, though when the market as a whole will fully recover is almost impossible to guess.”
And it’s about more than maintaining prosperity within the small bubble of Leeds. Those with their fingers on the pulse of the market know that properties across Yorkshire are partly measured against the yardstick of its regional capital.
Richard Green, residential sales partner at Halifax-based Brearley Greens Estate Agents, said: “We keep a very close eye on the Leeds housing market because it’s a useful measure of the state of affairs regionally.
“During the last period of growth so much of the wealth creation came from service industries and that emanated from regional capitals like Leeds, so much so that places like Halifax have almost become suburbs of Leeds, in certain respects.
“If good things happen in the Leeds housing market it’s good for other parts of Yorkshire on many levels. Simple wealth creation does ripple out but also the comparative expense of buying in Leeds meant that many more people saw places like Halifax as being more affordable and commutable.
“So it’s actually in our interests for Leeds to be economically buoyant and for the housing market there to remain at a high level.
“Unfortunately at the moment things seem to be staying fairly constant but there’s already one or two seeds of recovery being sown and I think next year you’ll see a real difference.”
rod.mcphee@ypn.co.uk
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Sunday 12 February 2012
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