Prime and mortgage interest rates are forecast by Absa to be cut by a cumulative 300 basis points during the course of 2009 to reach a level of 12,5% by year-end.
RICS says UK rate cut could further restrict lending
(Foreign) LONDON (January 09) - The decision by the Bank of England to lower interest rates yesterday to just 1,5%, while welcome, is unlikely to provide any meaningful encouragement for banks to increase the availability of finance to either households or businesses, according to the RICS.
Indeed, the RICS says in an article on its website, the risk is that lenders are set to become even more restrictive over the coming months in the face of the worsening economic climate.
“With many first time-time buyers unable to find the finance to take an initial step onto the housing ladder and existing owner-occupiers needing to move similarly blighted, the time has come for the government to take direct action to restore an orderly property market.”
The RICS says the gap between new buyer enquiries and the number of mortgage approvals is increasing.
New buyer enquiries, according to the last RICS Housing Market Survey (November 2008), are at their best level since October 2006, whilst the Bank of England’s mortgage approvals data in the same month sank to its lowest point on record.
Guarantees for the new issuance of residential mortgage backed securities (RMBS) as recommended by Sir James Crosby needs to be adopted as soon as possible.
By removing the risk associated with wholesale lending through securitisation vehicles, Government guarantees should inject some much-needed confidence back into the RMBS market.
The RICS warns that incidences of negative equity and the level of home repossessions will increase if potential homebuyers continue to be frozen out of the market.
“A further period of sustained weakness in the housing market could deliver a further blow to consumer confidence and, in the process, lead to a deeper recession in the economy than might otherwise have been the case,” it cautions.
(Residential) JOHANNESBURG (January 09) - South African nominal annual average house price growth in the middle segment of the market slowed down to below 4% in 2008, according to Absa’s calculations, which was the lowest price growth recorded since 1996.
Absa forecasting 3% cut in rates but says outlook “bleak”
(Residential) JOHANNESBURG (January 09) - Prime and mortgage interest rates are forecast by Absa to be cut by a cumulative 300 basis points during the course of 2009 to reach a level of 12,5% by year-end, mainly as a result of declining inflation during this period.
(Property Tips) With the current wave of distressed property auctions, you may find yourself looking for a bargain at an auction. Follow these guidelines:
(Foreign) WASHINGTON (January 08) - After holding fairly stable for a year, US pending home sales declined in the face of job losses and an eroding economy, according to the National Association of Realtors®.
(Property Tips) DURBAN (January 07) - Many property buyers are confused by the myriad of mortgage options available and whether they should employ a mortgage originator - and if so, what are the benefits.
(New Developments) PIETERMARITZBURG (January 07) - Affordable, quality homes are being made available to first-time homebuyers in a new development in Pietermaritzburg.
(Foreign) LONDON (January 06) - The price of a UK typical house, as measured by Nationwide, fell by 2,5% in December, a stark contrast with the modest fall of 0,4% in November. This brings the annual rate of fall over the last twelve months to 15,9%.
(Residential) PRETORIA (January 06) - Everyone knows that there are hundreds of thousands of South Africans living in Perth and London, but not many are aware that there are also 30 000 living in Florida in the US, and thousands in the states of Georgia and Michigan.
US/European housing woes “more serious” than those of SA
(Consumer) CAPE TOWN (January 03) - South African homebuyers can be grateful they have escaped the direst consequences of the global credit crisis, says Bill Rawson, Chairman of Rawson Properties.
(Foreign) LONDON (January 02) - The Government needs to bring many of the UK’s 762 635 empty homes back into use if they are to find homes for the 72 130 families who will remain homeless and in temporary accommodation in the new year, say the Royal Institution of
