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Lloyds to close C&G branches

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/business/2009/jun/09/lloyds-cheltenham-gloucester-close

• The latest round of cuts will see the demise of 1,600 jobs
• Unite condemns the move as ‘nothing short of disgraceful’

The entire Cheltenham & Gloucester branch network is to close by November, as Lloyds Banking Group cuts another 1,660 jobs after the merger with HBOS.

The bank, which yesterday began repaying its multibillion-pound loan from the taxpayer, confirmed this lunchtime that all 164 C&G branches will shut within five months. This will mean about 1,000 employees will lose their jobs.

Lloyds is also cutting 265 positions across its personal loans division, which will lead to job losses in Chester and Cardiff, with other jobs also going across its retail, personal finance and mortgage sales operations.

The Unite union attacked the move as “nothing short of disgraceful”. It will mean the end of the C&G name on the high street after more than 150 years, but the brand will continue to exist on mortgages sold through brokers.

News of the closures broke this morning, sending Lloyds scrambling to inform C&G staff of the plan and sparking fierce debate online.

One branch worker said that C&G customers should not panic, as “branches will not close for months”. From November, they will have to use one of Lloyds’ 1,800 remaining branches.

Lloyds said that compulsory redundancy would be “a last resort” if it could not find new roles for those affected.

“It is always difficult to make decisions about our business that affect our colleagues,” said Helen Weir, Lloyds’ group executive director for retail banking. “We will work through these changes carefully and sensitively and continue to consult closely with our unions throughout the process.

“Cheltenham & Gloucester is a very strong brand. The strategic focus for C&G from now on will be to further strengthen its intermediary and direct savings businesses. Another major priority for us is to ensure that we manage the closure of the C&G branch network so that it causes as little disruption as possible to our customers. We have a number of measures in place to achieve this.”

Lloyds has already eliminated about 3,000 positions since finalising the takeover of HBOS. Last week it announced 510 job losses across its retail banking arm. It has also decided to drop the Clerical Medical name, which was part of HBOS, with the loss of 300 jobs.

Lloyds employs 140,000 people, and City experts believe 25,000 jobs could eventually go once HBOS is fully integrated.

Unite had already called on Lloyds to end the uncertainty hanging over its workers. Its general secretary, Derek Simpson, warned this morning that closing the C&G network would “rip the heart out of hundreds of local communities up and down the country”.

“Hundreds of staff who have worked hard for years to make the C&G brand a success will view this news as a kick in the teeth,” he said. “UK taxpayers have not poured billions of pounds into this organisation just to see it sack thousands of hard-working people.

“Front-line staff in banks across the country are blameless for the mistakes of management which have brought the important finance industry to the point of collapse. Yet these workers now face an uncertain future as Lloyds abandons C&G’s high street branches. This is truly a dark day for the financial services sector in this country.”

C&G was founded in 1850 in Cheltenham, and was acquired by Lloyds in 1995.

Industry experts had predicted several months ago that Lloyds might drop C&G in favour of Halifax, which is the UK’s biggest mortgage lender and is perceived to be a stronger brand.

Alex Potter, banking analyst at Collins Stewart, believes the closure of the C&G branch network could be an attempt to prevent the European Commission blocking the merger. Shares in Lloyds plunged by a third on 20 May after the bank warned shareholders that it may be forced to slim down its business to win state aid approval from the commission.

“There are still antitrust concerns about the Lloyds-HBOS merger at commission level,” Potter told BBC Radio 4’s Today programme. “Perhaps this is a sop to the regulators.”

Lloyds launched its takeover of HBOS last autumn after the government said it would waive competition rules that would otherwise have made the deal impossible.

Cuts at RBS

Unite also said today that 500 staff at RBS have been told that they are at risk of redundancy.

“The closure of a cash centre in Glasgow impacting around 140 staff and 360 job losses throughout other UK locations will devastate staff. Unite is opposed to compulsory job losses and through continued consultation with the bank will seek to find suitable alternative employment for workers,” said Unite national officer Rob McGregor.

These cutbacks are part of the wide-ranging cutbacks announced in April by RBS, which plans to cut its UK workforce by 4,500.

  • Lloyds Banking Group
  • Banking
  • Job losses
  • Trade unions
  • Financial crisis
  • HBOS
  • Redundancy
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House prices buoyed by property shortage

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/money/2009/jun/09/rics-house-prices

A combination of rising buyer inquiries and a shortage of homes for sale is supporting house prices, Rics says

Increasing interest from new buyers plus a shortage of properties for sale is helping to stabilise house prices, according to the latest housing market survey from the Royal Institution of Chartered Surveyors (Rics).

Rics’s members said buyer inquiries increased for the seventh month in a row in May, and at the fastest rate since 1999. Estate agents also saw a rise in sales, albeit from very depressed levels. The average number of properties sold over the past three months rose to 11.8, up from 10.6. Fewer surveyors also reported a fall in house prices.

At the same time new instructions have continued to fall: the average number of properties on estate agents’ books has dropped in the past month to 58.4 from 69.4, and by more than a third over the past year.

Rics said the lack of new supply coupled with the increase in activity is providing some support for house prices, but warned there could be further price falls to come. Spokesman Ian Perry said: “The housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising.

“However, it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand. Moreover, with the economic backdrop still quite uncertain, unemployment set to continue increasing sharply and finance for first-time buyers still in short supply, there are a number of significant obstacles for the market to overcome over the coming months.”

The findings from Rics were supported by house price figures published today by the government’s communities department , which showed prices rose by 1.1% month-on-month in April, after dropping 1.3% in March. This means the year-on-year fall in house prices narrowed to 13% in April from 13.6% in March.

In London, the improving market is being driven by first-time buyers who have built up equity over the past two years, or who have been lent deposits by their parents, taking advantage of lower prices, according to estate agent Ludlow Thompson.

Director, Stephen Ludlow, said: “Sentiment has changed considerably – at the end of last year nobody could see a floor for prices. Whilst prices may not have reached the very bottom buyers are no longer worried that the market is still in meltdown mode.

“The pickup in demand in May was so sudden that it has been the lack of supply of properties actually on the market that caused the bounce in prices. We’ve had to move lettings staff on to sales to deal with the surge in activity.”

However, Howard Archer, chief UK and European economist for IHS Global Insight, said he remained sceptical that house prices had bottomed out.

“It is not uncommon for there to be months of rising prices when house prices are still trending down. Most recently, the Halifax reported that house prices rose by 2% month-on-month in January but then fell sharply during February-April before rising again in May.

“Housing market activity is still very low by past norms and at a level consistent with falling house prices, and despite markedly rising buyer interest we believe that the pickup in actual house purchases is likely to be gradual and fitful for some time to come.”

  • House prices
  • Property
  • First-time buyers
  • Housing market
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House prices buoyed by property shortage

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/money/2009/jun/09/rics-house-prices

A combination of rising buyer inquiries and a shortage of homes for sale is supporting house prices, Rics says

Increasing interest from new buyers plus a shortage of properties for sale is helping to stabilise house prices, according to the latest housing market survey from the Royal Institution of Chartered Surveyors (Rics).

Rics’s members said buyer inquiries increased for the seventh month in a row in May, and at the fastest rate since 1999. Estate agents also saw a rise in sales, albeit from very depressed levels. The average number of properties sold over the past three months rose to 11.8, up from 10.6. Fewer surveyors also reported a fall in house prices.

At the same time new instructions have continued to fall: the average number of properties on estate agents’ books has dropped in the past month to 58.4 from 69.4, and by more than a third over the past year.

Rics said the lack of new supply coupled with the increase in activity is providing some support for house prices, but warned there could be further price falls to come. Spokesman Ian Perry said: “The housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising.

“However, it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand. Moreover, with the economic backdrop still quite uncertain, unemployment set to continue increasing sharply and finance for first-time buyers still in short supply, there are a number of significant obstacles for the market to overcome over the coming months.”

The findings from Rics were supported by house price figures published today by the government’s communities department , which showed prices rose by 1.1% month-on-month in April, after dropping 1.3% in March. This means the year-on-year fall in house prices narrowed to 13% in April from 13.6% in March.

In London, the improving market is being driven by first-time buyers who have built up equity over the past two years, or who have been lent deposits by their parents, taking advantage of lower prices, according to estate agent Ludlow Thompson.

Director, Stephen Ludlow, said: “Sentiment has changed considerably – at the end of last year nobody could see a floor for prices. Whilst prices may not have reached the very bottom buyers are no longer worried that the market is still in meltdown mode.

“The pickup in demand in May was so sudden that it has been the lack of supply of properties actually on the market that caused the bounce in prices. We’ve had to move lettings staff on to sales to deal with the surge in activity.”

However, Howard Archer, chief UK and European economist for IHS Global Insight, said he remained sceptical that house prices had bottomed out.

“It is not uncommon for there to be months of rising prices when house prices are still trending down. Most recently, the Halifax reported that house prices rose by 2% month-on-month in January but then fell sharply during February-April before rising again in May.

“Housing market activity is still very low by past norms and at a level consistent with falling house prices, and despite markedly rising buyer interest we believe that the pickup in actual house purchases is likely to be gradual and fitful for some time to come.”

  • House prices
  • Property
  • First-time buyers
  • Housing market
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House prices buoyed by property shortage

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/money/2009/jun/09/rics-house-prices

A combination of rising buyer inquiries and a shortage of homes for sale is supporting house prices, Rics says

Increasing interest from new buyers plus a shortage of properties for sale is helping to stabilise house prices, according to the latest housing market survey from the Royal Institution of Chartered Surveyors (Rics).

Rics’s members said buyer inquiries increased for the seventh month in a row in May, and at the fastest rate since 1999. Estate agents also saw a rise in sales, albeit from very depressed levels. The average number of properties sold over the past three months rose to 11.8, up from 10.6. Fewer surveyors also reported a fall in house prices.

At the same time new instructions have continued to fall: the average number of properties on estate agents’ books has dropped in the past month to 58.4 from 69.4, and by more than a third over the past year.

Rics said the lack of new supply coupled with the increase in activity is providing some support for house prices, but warned there could be further price falls to come. Spokesman Ian Perry said: “The housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising.

“However, it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand. Moreover, with the economic backdrop still quite uncertain, unemployment set to continue increasing sharply and finance for first-time buyers still in short supply, there are a number of significant obstacles for the market to overcome over the coming months.”

The findings from Rics were supported by house price figures published today by the government’s communities department , which showed prices rose by 1.1% month-on-month in April, after dropping 1.3% in March. This means the year-on-year fall in house prices narrowed to 13% in April from 13.6% in March.

In London, the improving market is being driven by first-time buyers who have built up equity over the past two years, or who have been lent deposits by their parents, taking advantage of lower prices, according to estate agent Ludlow Thompson.

Director, Stephen Ludlow, said: “Sentiment has changed considerably – at the end of last year nobody could see a floor for prices. Whilst prices may not have reached the very bottom buyers are no longer worried that the market is still in meltdown mode.

“The pickup in demand in May was so sudden that it has been the lack of supply of properties actually on the market that caused the bounce in prices. We’ve had to move lettings staff on to sales to deal with the surge in activity.”

However, Howard Archer, chief UK and European economist for IHS Global Insight, said he remained sceptical that house prices had bottomed out.

“It is not uncommon for there to be months of rising prices when house prices are still trending down. Most recently, the Halifax reported that house prices rose by 2% month-on-month in January but then fell sharply during February-April before rising again in May.

“Housing market activity is still very low by past norms and at a level consistent with falling house prices, and despite markedly rising buyer interest we believe that the pickup in actual house purchases is likely to be gradual and fitful for some time to come.”

  • House prices
  • Property
  • First-time buyers
  • Housing market
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House prices buoyed by property shortage

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/money/2009/jun/09/rics-house-prices

A combination of rising buyer inquiries and a shortage of homes for sale is supporting house prices, Rics says

Increasing interest from new buyers plus a shortage of properties for sale is helping to stabilise house prices, according to the latest housing market survey from the Royal Institution of Chartered Surveyors (Rics).

Rics’s members said buyer inquiries increased for the seventh month in a row in May, and at the fastest rate since 1999. Estate agents also saw a rise in sales, albeit from very depressed levels. The average number of properties sold over the past three months rose to 11.8, up from 10.6. Fewer surveyors also reported a fall in house prices.

At the same time new instructions have continued to fall: the average number of properties on estate agents’ books has dropped in the past month to 58.4 from 69.4, and by more than a third over the past year.

Rics said the lack of new supply coupled with the increase in activity is providing some support for house prices, but warned there could be further price falls to come. Spokesman Ian Perry said: “The housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising.

“However, it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand. Moreover, with the economic backdrop still quite uncertain, unemployment set to continue increasing sharply and finance for first-time buyers still in short supply, there are a number of significant obstacles for the market to overcome over the coming months.”

The findings from Rics were supported by house price figures published today by the government’s communities department , which showed prices rose by 1.1% month-on-month in April, after dropping 1.3% in March. This means the year-on-year fall in house prices narrowed to 13% in April from 13.6% in March.

In London, the improving market is being driven by first-time buyers who have built up equity over the past two years, or who have been lent deposits by their parents, taking advantage of lower prices, according to estate agent Ludlow Thompson.

Director, Stephen Ludlow, said: “Sentiment has changed considerably – at the end of last year nobody could see a floor for prices. Whilst prices may not have reached the very bottom buyers are no longer worried that the market is still in meltdown mode.

“The pickup in demand in May was so sudden that it has been the lack of supply of properties actually on the market that caused the bounce in prices. We’ve had to move lettings staff on to sales to deal with the surge in activity.”

However, Howard Archer, chief UK and European economist for IHS Global Insight, said he remained sceptical that house prices had bottomed out.

“It is not uncommon for there to be months of rising prices when house prices are still trending down. Most recently, the Halifax reported that house prices rose by 2% month-on-month in January but then fell sharply during February-April before rising again in May.

“Housing market activity is still very low by past norms and at a level consistent with falling house prices, and despite markedly rising buyer interest we believe that the pickup in actual house purchases is likely to be gradual and fitful for some time to come.”

  • House prices
  • Property
  • First-time buyers
  • Housing market
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House prices continue decline

Monday, June 1st, 2009

• Land Registry says house prices fell by 16.2% year-on-year
• Volatility in prices blamed on low transaction levels

House prices in England and Wales fell by 0.3% in April, figures from the Land Registry showed today.

The figures, which are based on completed sales, showed the annual rate of price deflation remained at 16.2%, the same as in March and the biggest drop on record. However, the Land Registry said that although prices were still falling the speed of decline had been “fairly static” over the past two months after a .

April’s 0.3% fall follows a 0.2% drop in March and brings the average price of a home in England and Wales down to £152,898.

However, the national average masks regional variations, and in six areas prices were actually up over the month. The biggest increase was in London, where prices rose by 1.4% to an average of £302,411, while the East Midlands, which had seen prices fall last month, also saw a 1.2% increase. Homes in the region changed hands for an average of £122,532.

In Wales, house prices increased by 0.3% to an average of £122,241, but remain 12.8% down on last April.

Elsewhere, some of the regions which recorded price rises in March experienced a month of falls: in the north-east of England prices dropped by 2.6%, more than reversing the 1.8% rise recorded last month.

Such volatility in house prices is common when transaction levels are low, and the latest Land Registry figures for sales volumes confirm that the housing market all but ground to a halt in the early months of this year.

Between November and February the number of sales averaged 31,315 a month, compared with 75,374 in the same period of the previous year. In February the number of transactions slumped to just 25,592, half of the 51,121 recorded in February 2008. In London 2,933 properties changed hands compared with 7,152 last year.

Although there has recently been a slight increase in activity in the mortgage market it is still 60% down on last year.

Earlier today, property firm Hometrack said house prices remained unchanged in May, the first time in 20 months its index has not reported a monthly drop. It said a combination of stronger sales volumes, continued buyer interest and a dwindling supply of property for sale had “provided a short-term boost” to confidence in the housing market.

Similar factors, particularly a lack of supply of available homes, were said to be behind a 1.2% rise in prices reported last week by Nationwide building society.

Richard Donnell, Hometrack’s director of research, cautioned against reading too much into the news that prices had not dropped in May. “Given the weak outlook for the economy, house prices are expected to remain under downward pressure for the foreseeable future,” he said.

“The willing purchasers that are returning to the market are largely confined to the more wealthy areas of the country and limited to those buying with cash or who require low LTV [loan-to-value] mortgages.

“A broad based recovery in the housing market requires a broad base of buyers and the majority of would-be first time buyers remain excluded from the market.”

  • House prices
  • Property
  • Housing market
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Pitch perfect at a car boot sale

Monday, June 1st, 2009

Marc Lockley is the Negotiator. This week he sees what life is like on the other side – as a car boot sale retailer

If your house is full of unwanted trinkets, toys and tat and you could do with some extra cash, a car boot sale could be a great solution to your problems. In a matter of hours you will have decluttered your house, perhaps paid for a weekend away, and learned a little bit about what it is like to be a retailer – a helpful skill for a negotiator. There are several things you can do to maximise your profits and make sure you earn enough to cover the entry fee.

Do a reccy

Go to carbootjunction.com or yourbooty to choose a location. Visit a site as an observer to get an understanding of the market and who is buying there. See where the busiest stalls are pitched; often these are close to the entrance or food stalls.

Pack the night before

Put your items in boxes so you can quickly pack your car in the morning. Take a collapsible table and ground sheets on which to lay the items; make sure this is last in the boot so when you get there you can get them out first. Look at the weather forecast the night before to help you prepare efficiently.

I would suggest not putting prices on items; firstly it saves time, and secondly people may pay more than you expect for an item. But make sure you are aware of the going rate for your gear and know how much you are prepared to accept for each item – visit sites like eBay to get an idea. Last year a Rene Lalique vase was bought by a woman at a car boot sale in Dumfries for £1 and fetched £32,450 at auction at Christie’s; visit an antiques shop beforehand if you think an item could be valuable!

Arrive early

Get to the site before the official sellers’ opening time so you can be one of the first in the queue and if possible choose a high-traffic site. If it is raining look for a dry pitch to sell your goods. Go with a friend – it helps to have an extra pair of eyes as unfortunately there can be thieves about, and it also makes it more fun. If you have time, check out the prices of other sellers to make sure you are competitive.

Pitch like a pro

Set up quickly and efficiently. Lay out your store like a retailer would: put seasonal items at the front with products placed in logical groupings. For example, on a summer’s day put barbecue and camping equipment and parasols prominently, and popular all-year-round items like buggies on a “children’s goods” rug. If you are selling clothes, use a clothes rail to present them.

Offering customers a drink may help drum up trade; on a hot summer’s day offer a nice refreshing squash or coffee on a cold frosty morning.

When your stall is set out, take a look at it from the front as a customer sees it – would the store appeal to you if you were passing by?

Think what could stop people buying products and have an answer ready for any questions.

“Does the CD work?” – bring a CD player for people to try it out before they buy.

“Does the electronic game work?” – bring batteries.

“I’ve got no way of carrying it around” – have bags at hand.

“How does this work?” – bring the manuals and packaging.

Now put on your money belt (with plenty of loose change) and prepare to haggle!

Create some point of sale material

People love a bargain. Make signs using sales lines to attract customers – for example, Bogof (buy one get one free) or more creative ones like “collector’s gems” for some of your older items such as niche magazines or vinyl records.

Use your negotiating skills

The best hagglers arrive early. Be prepared to bargain and do it with smile and charm. Package items up; if someone is interested in the buggy why not ask them a few questions, for example the child’s age and sex. They may be interested in buying a tricycle and a few Thomas the Tank Engine toys – your original sale could double!

If you think someone’s offer is too low, politely say no and tell them why you feel it is worth the price you are asking – expert hagglers aren’t fearful of early rejection and often bounce back later with a higher proposal.

Move things around

If some items aren’t selling well move them to a different position on the stall as customers may have missed them when walking past.

Remember why you came

If the idea was to declutter, towards the end of the sale create an “everything must go” sign. If you wanted to make money and think you might do better selling some items elsewhere, put them to one side. Use your vocal cords to good effect and let customers know of some great tactical combinations; for example the sun hat and sunglasses were £6, now £3 for the pair.

  • Consumer affairs
  • Saving money
  • Shopping
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Mortgage lending hits eight-year low

Wednesday, May 27th, 2009

Bankers’ association figures suggest housing market ‘is over the worst’ as homebuying activity picks up

Mortgage lending from high street banks slumped to an eight-year low in April, the British Bankers’ Association (BBA) said today, but there were also signs of an increase in homebuying activity.

Net lending, which takes into account repayments, increased by £2.7bn over the month, down from £3.4bn in March. Gross mortgage lending stood at £7.9bn in April compared with £8.7bn in March and a six-month average of £9.9bn. The figure is 52.4% lower than in the same month last year.

However, there was some evidence that activity among homebuyers had picked up as gross lending for house purchases crept up to £3.5bn against a six-month average of £2.9bn. This was up on the previous month’s £3.4bn, but 29.7% lower than the amount lent in the same month last year.

The number of mortgages approved for house purchases also edged upwards to 27,685, around 1,000 more than in March and well above a six-month average of 23,812. The average home loan for a purchase had a value of £129,100, 16.7% lower than last April.

David Dooks, statistics director at the BBA, said: “The house purchase part of the mortgage market appears to have stabilised, with slightly more approvals coming through, although April’s weak net mortgage lending reflects the lower number of approvals in previous months.”

Howard Archer, chief economist at IHS Global Insight, said the figures provided further evidence that “housing market activity has very likely passed its worst point”, but was nonetheless very weak compared with long-term norms.

“The BBA data reinforce our belief that the pick-up in housing market activity will be gradual and fitful for some time to come given ongoing very poor economic fundamentals and still-tight credit conditions,” he said.

He expected house prices to fall significantly further, dropping by another 12 from their current levels to bottom out in mid-2010.

Consumer borrowing

Borrowing on credit cards, meanwhile, increased very slightly in April with £6.1bn in new spending going on to plastic compared with a six-month average of £6bn, but down 10.8% compared with last April. However, the value of repayments matched the amount spent at £6.1bn. Lending through personal loans and overdrafts remained steady at £1.5bn, down 39.3% compared with the same month last year.

“Consumer borrowing is likely to be limited over the coming months by still-tight lending conditions as many people increasingly looking to rein in their borrowing,” Archer said.

“Rising debt levels, historically low household savings rates and sharply lower house prices mean that there is a pressing need for many consumers to improve their balance sheets.”

While there is evidence that people are being relatively conservative in their borrowing, figures published today by comparison site Confused.com suggested worrying levels of consumer debt. Research by the firm showed that on average for every £1 earned an individual will owe £1.02.

According to the study, the area of the UK with the biggest discrepancy between borrowing and income is Kingston upon Thames in Surrey, where debts were equivalent to 169% of annual income, followed by Watford, with 166%. People in Manchester fared much better with debts equalling 51% of income.

  • Mortgages
  • Property
  • Borrowing & debt
  • Banks and building societies
  • Mortgage lending figures
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Dubai suffers biggest house price slump

Tuesday, May 26th, 2009

Construction boom turns to bust as Gulf state leads worldwide slump in house prices

Dubai, once home to the world’s biggest construction boom, is now the scene of the world’s biggest property slump, according to figures published today by estate agent Knight Frank.

House prices in the desert sheikhdom dropped by an extraordinary 40% in the first three months of 2009, outpacing falls anywhere else in the world after an investment bubble burst.

Singapore, the nation worst hit by the collapse in world trade, saw the second biggest fall, with property prices down 16.2% in the quarter. Bucking the trend were Finland, where house prices rose 4% over the three months, and Jersey, where prices surged by 5.6%. The fall in sterling has prompted foreign buyers to snap up property in the channel island tax haven, making homes even more out of the reach of local buyers.

A 16.5% price fall in the UK over 12 months placed it among the five countries with the biggest annual decline, but its quarterly decline, at 4.5%, was exceeded by many other countries.

The global turnaround in house prices has been remarkable. A year ago, homes in Dubai were spiralling upwards on an annual growth rate of 48%. The boom spawned developments such as the Palm Jumeirah and Burj Dubai, the world’s tallest tower, but now apartment blocks stand empty or half-finished. Dubai’s ruling family, the Maktoums, have already sought a £13.5bn emergency loan from their oil-rich neighbour Abu Dhabi, and fears are growing that many of the region’s biggest properties companies are close to bankruptcy.

Dubai “is in a mess,” said Nick Barnes, head of international residential research at Knight Frank.

He added: “The inescapable trend is that the worst and most widespread economic recession since the 1930s continues to batter housing markets across the globe. Rising unemployment and concern among those still in jobs, added to constrained credit conditions, means that buyer demand for housing remains suppressed and confidence is low in most markets, which is inevitably having a negative impact on house prices.”

Barnes is cautious about calling the bottom of the cycle for global house prices, with only anecdotal evidence of “green shoots”.

“There is sporadic evidence of buyers snapping up relative bargains, however of those buyers in a position to move, many are still waiting for clearer signs that markets are approaching the bottom of the cycle,” he said.

“Moreover, in a falling market, sellers are usually forced to a greater or lesser extent which means that opportunities to buy are greatly reduced and transaction volumes correspondingly low.”

The countries which did not experience the long boom in prices seen in the Anglo-Saxon world are now apparently avoiding the bust. Switzerland, where house prices rose by an average of just 1.5% a year over the past two decades, saw a 2.1% quarter-on-quarter gain and 5.6% over the year.

In Germany, prices fell by just 1.5% over the year. But Knight Frank admits that it has never been more difficult to access data about house prices, with extraordinary conditions in many markets delaying the publication of statistics. Prices in Latvia fell 36% over the year and in Poland by 13%, but neither country has yet provided figures for the first quarter of 2009.

Biggest price falls, Q1 2009

Dubai down 40.0%

Singapore down 16.2%

Estonia down 9.9%

Norway down 6.2%

Denmark down 6.1%

Biggest price rises, Q1 2009

Jersey up 5.6%

Finland up 4%

Thailand up 2.7%

Israel up 2.6%

Switzerland up 2.1%

  • Buying property abroad
  • Property
  • House prices
  • Housing market
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Prices rise by 2.4% on biggest property website

Sunday, May 17th, 2009

Asking prices on Britain’s biggest property website were up 2.4% in May in fresh evidence that the housing market crash may be levelling out.

But Rightmove.co.uk, which lists 90% of the properties for sale in the UK, said that the number of new sellers remains low and the supply of unsold stock “stubbornly high”, averaging roughly 71 properties per estate agency branch.

The average property price on the site edged ahead to ?227,441 in May from ?222,077 in April, but the number of new sellers in the month totalled 61,000 compared with 135,000 in May last year.

Miles Shipside, commercial director of Rightmove, said: “Buyer sentiment is improving, but the number who can proceed has been savaged by the mortgage famine. At present it looks like the market is bumping along the bottom in terms of transactions, with limited supply preventing further price falls.”

A renewed rise in house prices will disappoint most of the population, according to an ICM poll last week, which found that 64% of people want house prices to stay flat or fall. But Rightmove said falling prices have left many households without enough equity to fund a move, and that even sellers with 25% equity are fearful of moving, as they are now borderline when it comes to getting the best mortgage deals.

“Remortgaging took off in 2001 when lenders seemed to lose all sense of prudence, and there followed eight years of equity abuse that eroded the cushion that a decade of rising house prices had built up,” Shipside said. “This is one of the factors restricting the volumes in the housing market, and will only be resolved by affordable mortgage products at higher loan-to-value ratios or substantial increases in property values. It is impossible to put a timescale on this.”

  • House prices
  • Property
  • Rightmove
  • Housing market
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