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Should we stretch for a mortgage?

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/money/2009/jun/10/property-mortgage-renting-self-employed

Q We are renting?a house, having sold our flat in December 2008. We have about £70,000 in the bank and would like to buy again. My partner has a permanent (and, we think, safe) job that he’s been in for 11 years. I have been self-employed on and off since 2006 (but I don’t have any ongoing accounts – I was claiming unemployment benefit for a couple of months in 2007 and have claimed state maternity allowance in the last two years, too) but I’m self-employed until the end of July 2009 (it will have been a job for one year).

I am looking to work again after this job ends (there is a chance it may continue, but nothing is definite). We have a toddler and would like another child relatively soon, but I’d also like to remain working.?

I earn a good income and we have lots of spare cash (I do save a bit), but when I’m not working?we can just about get by on my partner’s wages.?

I’m not sure whether to stick at the freelance work, or if I’d be best getting something permanent that will count towards a mortgage – but I know I’ll earn?less, possibly half my?freelance day.?

I guess my question is, how much should we stretch ourselves in terms of the mortgage? If we shop around for mortgage offers, then we will know our situation – I think it’s possible that my income could be taken into account (but it’s so uncertain). We are thinking about moving out of London to get a cheaper property. However, I am more likely to get work in London and I can’t see how we can both logistically commute with our small child (I don’t want to leave him too long). HW

A Being self-employed is not, in itself, a barrier to getting a mortgage but you do need to have at least two years’ evidence of income. This doesn’t necessarily need to be formal accounts, as lenders will happily take tax statements issued by HM Revenue & Customs as evidence. If you don’t have these, I would start to worry.

If you are self-employed and tax is not deducted from what you earn at source (which is unlikely), you are legally required to file a self-assessment tax return each year. If you haven’t been doing this, you face financial penalties and a big bill for unpaid tax.

But, assuming that you have been filing tax returns, you should also have tax statements which will provide the evidence of income that you will need to have your income taken into account when applying for a mortgage. So you don’t need to give up your freelance work just to get a mortgage.

As far as how much you should stretch yourselves, a lot depends on your future income. If you are planning to have another child, you need to take that into account when looking at the cost of mortgage repayments. And you also need to look carefully at the financial implications of moving out of London. Although you may be able to get a cheaper property, you have to factor in the cost of commuting – not to mention child care costs for the time you spend on your way to and from work.

  • Mortgages
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Mortgage protection could become mis-selling scandal

Tuesday, June 9th, 2009

Source: http://www.guardian.co.uk/business/2009/jun/09/mortgage-insurance-warning

Don’t cut protection in face of rising unemployment, regulator tells insurers

City watchdog Lord Turner attacked insurers today for threatening to water down unemployment protection on mortgages, warning he would investigate any attempt to push through price rises due to the recession.

The chairman of the Financial Services Authority warned the industry it risked repeating the mistakes of past scandals such as the mis-selling of endowment mortgages.

Concern has grown that insurers plan to increase prices for customers with mortgage payment protection insurance and restrict the scope of policies to reduce payout costs, ahead of an expected surge in unemployment in the second half of the year.

He told an audience of insurance executives at a conference organised by the Association of British Insurers that the industry would provoke an angry response from customers, which the regulator would need to take seriously.

“Whilst it is natural for the industry to respond to changes in risk, this raises issues with both unfair contract terms, disclosure and our ‘treating customers fairly’ principles,” he said.

“How many consumers would have taken up this cover if they had known that at the very time they needed the protection the most, the price of it could significantly increase or the amount of cover decrease?

“This is an area where insurers must expect us to intervene to address poor consumer outcomes. And more than that they must think strategically about the impact of their actions on the sector’s reputation.”

The warning is understood to follow moves by the Post Office to raise prices on its mortgage protection policies that cover payments during periods of unemployment or after accidents and during long-term sickness. In April the Post Office gave 30 days notice that it also planned to reduce the level of cover from a maximum £2,500 a month to £1,500. Claimants will also have to wait for 90 days after stopping work before they receive any money. The delay was previously 30 days.

Turner said he was aware the number of people with the insurance had fallen in recent years. In 2005 there were 2.5m policies covering just over a fifth of the 11.6m mortgages in the UK. By 2007 MPPI policies had fallen to 1.2m and 700,000 in 2008.

He said: “While mortgage payment protection insurance has not previously been a major focus of our concerns, it may become one in an economic downturn. As the likelihood of unemployment-related claims increases, some insurers are responding by increasing premiums or reducing cover for existing policyholders.”

The FSA and the Competition Commission have spent the last four years investigating accusations of profiteering by lenders that sell payment protection insurance on loans and credit cards. Last year the commission ruled that selling practices were so bad that it banned the sale of the most profitable product until at least a fortnight after the purchase of a credit card or loan. The industry appealed, but was unsuccessful.

Turner said he would not hesitate to repeat the enforcement measures on insurers that contravened rules on the sale of mortgage payment protection.

He said: “The recent problems may have been primarily in the banking industry and that is where the most significant changes are needed, but in an era of heightened public expectations that the FSA will identify and prevent major problems from recurring, we need to reinforce our capability across all high impact firms.

“And we need to respond to people’s expectations that we will be more forceful in pursuing enforcement against reckless or abusive practices which cause customers harm.

“We certainly need to ensure that our responses are proportionate and are focused on what matters: that they are outcome focused. And we will also continue to look for market solutions where they are available, such as in addressing contract certainty and commission disclosure.”

  • Regulators
  • Insurance industry
  • Mortgages
  • Insurance
  • Payment protection insurance
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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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If you do one thing this week … car share

Monday, June 8th, 2009

Sharing a lift on the way to work not only spreads the cost of petrol, it will give you and your company a green glow, says Adharanand Finn

In these days of mobile phones and iPods, we’re uncomfortable letting strangers into our personal space. Only small children and old ladies would risk smiling at someone on a city bus. So why would you want to let someone into the cosy confines of your car, particularly in the fragile early morning hours before the start of the working day?

Advocates of lift sharing have a host of sound reasons. The most compelling are that it saves you money and reduces car emissions – this is simple maths: two people driving together in one car produce roughly half the emissions of two people travelling in two cars. They can also split the cost of petrol.

More questionable is the assertion, on the leading lift sharing website, liftshare.com, that it is more fun. You can make new friends, it cheerfully suggests. A nice idea, but in practice – at least when I tried it years ago – just as you come to arrange a lift you begin worrying about the possibility that your potential sharer will be a mass murderer or something.

At best your lift sharer will be a terrible bore or have poor personal hygiene (or both), and you’ll be stuck together, for hours, just the two of you, side by side, staring at the road ahead. For the sake of a few pounds and some petrol emissions wouldn’t it be easier to not bother?

This uneasiness we feel about sharing a car with a stranger has not only contributed to the slow death of hitchhiking in recent years (in the UK at least), but is prohibiting the uptake of lift sharing.

Liftshare.com is now more than 10 years old, and although it has more than 300,000 registered users, many, I suspect, are like me – people who signed up a long time ago but have never actually arranged a lift, while others may not be able to match their requirements with a person who can help out. Artist Melissa Beagley recently tried to arrange a lift from London to Devon on a Friday night, but couldn’t find a single person going her way.

But with the recession in full swing and the planet getting ever hotter, this is a good moment to reassert your faith in your fellow humans and do something to help this noble lift sharing idea on its way. With tomorrow designated National liftshare day there is no better time to start.

The uncertainty of potential sharers can be reduced to some extent by setting up a lift sharing group within your workplace. You can do this with a basic noticeboard in the office on which people can list their journeys, or on the office intranet or online – liftshare.com will organise a page for your company on its website.

An office-based scheme will also give you a chance to get to know your colleagues better, and it should be easier to arrange a lift as you’re all heading the same way – to work.

The only downside, according to Amy Bunting, who lift shared when she worked for Barclaycard in Northampton, is people being late for the pickup.

“One man I shared with was absolutely terrible at getting up and he ended up getting dressed in my car on the way to work most mornings,” she says. “That looked great when we arrived at work and he was doing up his belt and tucking his shirt in as we got out of the car.”

If you ask nicely, your company may stump up some incentives to get the scheme started – and encourage people to be on time, such as vouchers for the canteen. In return it gets a positive boost to its eco-status and, if the scheme takes off, the need for fewer parking spaces.

For maximum green bonus points it could even turn a few of the redundant spaces into an office allotment – or is that going a bit too far?

  • Saving money
  • Work & careers
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Drop in childminders prompts fears of holiday crisis

Sunday, June 7th, 2009

• Lib Dems blame ‘toddler curriculum’ for decline
• One in seven leave sector?over six years

Parents could be faced with a childcare shortage this summer, according to figures that reveal there are 10,000 fewer registered childminders than six years ago, with the numbers still rapidly declining.

At the very least, one in seven childminders has left the job since 2003, and the most dramatic reductions have come in the last year with the government’s introduction of its controversial “toddlers’ curriculum”.

The figures, released in parliament to the Liberal Democrats, reveal a six-year decline in the number of carers looking after under-eights, with the level dropping from 70,000 in 2003 to 60,900 in March this year. In the last 12 months there has been a more dramatic decline, with a loss of 4,000 childminders.

Annette Brooke, the Liberal Democrat education spokesman, warned of a crisis in the summer holidays, a time when parents often need extra childcare, and blamed the introduction of the Early Year’s Foundation Stage (EYFS), which has been dubbed a curriculum for toddlers. “The government’s overly prescriptive and bureaucratic approach to pre-school care is causing childminders to turn away from the profession,” she said.

The shortages are likely to be exacerbated by a baby boom in some areas of the country, which is also causing a shortfall in primary school places.

Childminders typically look after small numbers of youngsters in the carer’s own home; while nannies provide childcare in the child’s home.

The controversial EYFS was introduced last September. It sets 69 “early learning goals” for five-year-olds, and specialists in early child education have labelled it too prescriptive. Among the goals, children are required to “use their phonic knowledge to write simple regular words and make phonetically plausible attempts at more complex words”, and to “write their own names and other things such as labels and captions, and begin to form simple sentences, sometimes using punctuation”.

Childminders have to record children’s progress through the goals and their paperwork can be inspected by Ofsted.

Andy Fletcher, joint chief executive of the National Childminding Association, said there were several reasons behind the steady fall in childminders: the economy had played a part, with job losses leading families to need fewer childminders, but the EYFS had “definitely” had a role.

“We know, anecdotally, of childminders giving up because of increasing regulation and a lack of training to help them,” he said. “Parents need genuine choice in childcare and there needs to be different types of childcare available. In some areas there are shortages and parents don’t have that choice. It affects both urban areas with high rates of working families and some rural areas as well.”

Brooke added: “As we approach the long school holiday it is going to be a real struggle for hard-pressed parents to find quality and affordable childcare. Childcare costs have spiralled over recent years and there is clearly a risk that the drop in the number of childminders is going to drive up costs even further.

“We already have the farcical situation where some parents find they are better-off giving up work rather than forking out for expensive childcare.”

Emma Knights, joint chief executive of the Daycare Trust, said the drop could partly be due to more parents opting for nurseries. “We need to look at the whole childcare sector across the piste. Taking all childcare into account there are a lot of places available to families. Nursery places and playgroups have risen at the same time as the decline in childminders.”

Sarah McCarthy-Fry, the schools minister, said: “It is nonsense to suggest that childminders are leaving the profession in droves as a result of the Early Years Foundation Stage. The EYFS is not a burden on childminders and most of them will be familiar with it because it’s what they are already doing – helping children learn and develop through play.

“The number of registered childminders has always varied over time, for a number of reasons. For example, before the introduction of their new registers Ofsted undertook an exercise to remove childminders who were no longer actively looking after children.”

  • Childcare
  • Children
  • Family
  • Education policy
  • Liberal Democrats
  • Family finances
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Insurance: Cover up those excesses

Friday, June 5th, 2009

Now you can ‘insure’ all the initial charges payable when claiming on a policy. But do the sums add up?

UK householders can insure all their policy excesses with one low-cost annual payment. Insure4excess, which made its name offering car hire users cheap excess insurance, will now cover all the excesses payable on the five main policies: home, car, health, travel and pet insurance. It is also offering standalone car excess cover for the UK, and claims that it can pay for itself immediately.

What is it?

The basic cover – bronze – costs £49 a year. Householders can get back the excesses on any claims during the year up to £250. So, if your dog required surgery and you had to pay the first £50 of the pet insurance, it would refund that. If you were burgled and forked out a £100 excess it would return that too.

Can you insure more?

The silver policy costs £75, covering all excesses paid on claims made in one year up to £500. Gold costs £99 and covers up to £750. Payouts are triggered when a claim is made to the principle insurer. Policyholders have to be 25 or older.

How do the savings work?

The company says the policies will pay for themselves in reduced premiums, achieved by increasing the excesses on their main policies. Insure4excess says travel cover typically carries a £50 excess, while home and motor policies feature excesses (the first portion of a claim, paid by the customer) of up to £250. Generally, the higher the excess, the lower the premium.

These policies make particular sense if you have made a claim and are facing increased premiums as a result.

Insure4excess.com managing director Simon Vella, says: “People purchasing standard motor, home and pet policies will collectively save between £48 and £120 by tweaking their excess liabilities – and this is just for basic policies, before other cover amendments are made to further cut premiums. Our annual policy is much cheaper than the savings that can be made, so consumers will be quids in even if they don’t have to claim back excesses.”

Any downsides?

The problem of high excesses is that you effectively end up paying any small claims yourself, as Insure4excess only pays out once you make a claim to your main insurer. If you raised the car policy excess to £750, and bought its gold policy, you would only be able to make a claim costing more than £750. This can work for car drivers who would always pay any small claims themselves because the cost of claiming would be more than outweighed by the following year’s rise in premium.

Can I insure only my car excess?

Yes, and it will appeal to newly qualified car drivers who are aged over 25.

The company’s gold annual excess cover is £79 – many new drivers will save more than this by increasing the excess on their car insurance to £750.

Insure4excess would meet the first £750 of a claim with the insurer picking up the rest. Again, to buy the policy, you have to be 25 or over, making it a no-brainer for newly qualified drivers facing a huge first car insurance premium. Insure4excess allows two claims a year up to £750 each.

It also offers bronze cover for £39 which solely covers motor excesses of up to £250 while the silver policy costs £59 and covers excess of up to £500 – both will offer some older drivers savings, particularly if they have made , but it looks as though 25-year-olds will save the most.

Can it work for me?

Go to the insurance comparison websites (the likes of Confused.com or Moneysupermarket.com) or ask your existing insurers how much you will save if you increase the excesses. Car insurers will typically cut premiums by £20-£40 a year if you lift the excess from £100 to £300 – more for younger drivers. Home insurers will do the same. Make a £10-£20 saving on each of the five main policies and you’ll be in the money – and better insured.

  • Insurance
  • Home insurance
  • Motor insurance
  • Consumer affairs
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Cash Isa rates tumble

Thursday, June 4th, 2009

• Barclays cuts rates to 0.1% on some cash Isas
• Savers warned best rates may not last long

Savers are being warned to check the interest paid on their individual savings accounts following a move by Barclays to slash the rates as low as 0.1% on some of its older accounts.

Loyal customers who have more than £18,000 accumulated in the bank’s variable-rate mini cash Isa have had their interest chopped from 0.31% to 0.1%. Those with less than £18,000 in the account were already earning 0.1%.

Barclays will continue to pay 3.61% AER to existing customers with its Golden Isa, a rate that includes a 1% bonus, but has disposed of the bonus for new savers.

A spokeswoman for Barclays said people stuck in the ultra-low earning Isa could not switch to the Golden Isa, as it did not accept transfers. However she denied Barclays was treating its loyal customers shabbily.

She said: “We are making some minor alterations to the interest rates in our current range, the vast majority of our savers will not be impacted.

“Our savings products have and continue to be very successful with MoreForMore and Monthly Savings being leading rates. We continue to review the rates on our range of saving accounts in tandem with market conditions to ensure they are fairly and competitively priced.”

She added that savers who wanted to switch out of an old Isa should speak to the bank about their options.

Barclays is not alone in cutting savings rates. Although the Bank of England monetary policy committee today held the base rate at 0.5%, several banks and building societies are reducing the amount they pay on deposits.

Andrew Hagger of Moneynet.co.uk said: “We’re only two months into the new tax year, yet some of the more attractive cash Isa accounts have, in the last seven days, either had their rates slashed or been withdrawn completely.”

In addition to swingeing cuts to Barclays Isas, Halifax has pulled its Direct Reward Isa, which paid 3% fixed for 12 months, while First Direct has chopped the interest on its e-ISA account from 3.06% to a fixed rate of 1.98%.

Last month, NatWest cut the rate it paid on its attractive e-Isa by 1% and withdrew its Cash Isa Plus – both were at or near the best rates on offer, paying more than 3.5% in most cases. NatWest’s e-Isa now pays 2.25% on balances up to £9,999 and 2.5% on savings above £10,000. .

Hagger said: “It’s starting to look as if some providers may have reached their targets for Isa deposits already and are content to offer a poorer deal to those who have been slow off the mark.

“So if you haven’t invested your Isa cash for 2009-10, even though there are still 10 months still to run in this tax year, it may be prudent to make your choice sooner rather than later, before some of the other top deals disappear too.”

  • Isas
  • Savings
  • Interest rates
  • Interest rates
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‘Your CV is exceptional … exceptionally bad, that is’

Thursday, June 4th, 2009

Last night’s Apprentice interviews were cringeworthy for many reasons, not least the interviewers’ performances. Have you ever endured a grilling from hell, asks Huma Qureshi

Oh dear, where on earth do we start when it comes to last night’s interview-round Apprentice? The penultimate episode of the series showed the candidates facing a grilling from Surallun’s cronies: Claude Littner (the bald cruel one), Bordan Tkachuk (the one with the spiky beard), Karren “nobody-calls-me-a-bitch” Brady, and Alan Watts (some lawyer we know nothing about).

It had it all: lies, profanities, bitchiness, tears and, well, just plain silliness (poor James. Still, he sort of had it coming, what with his Willy Wonka comment and all that).

Yet, despite their blips and blunders, you still had to feel sorry for this year’s lot. Lets face it, who would want to be interviewed by someone like cruel Claude? And who wouldn’t be rattled by an interviewer waving your finances in front of your face telling you your accounts are wrong?

Granted, an interview is not meant to be easy and you’re not there to make friends, but Claude is still one tough man to impress. “Your CV is exceptional,” he told James, who was so visibly relieved he actually closed his mouth. “Exceptionally bad, that is.” (James’s jaw promptly dropped again). Talk about leading you up the garden path.

Ditto with Karren. There she is one minute amiably chatting away with each of the girls, luring them in with her smiles, and then bang! The killer question disguised as a nicety. She caught out Lorraine’s CV lie and even managed to fluster head girl-material Kate.

But never mind the candidates, how did The Apprentice interviewers do in assessing the candidates? Not very well according to our in-house HR team:

“Interviews should be conducted to give people the best chance to showcase their skills and experience. Starting an interview [Lorraine's] by saying ‘you are clearly delusional’ is not only an assumption but it is offensive – the interviewer started the candidate off completely on the wrong foot.

“The best interviewers do not make assumptions, they collect evidence. And last night’s interviews were riddled with people making assumptions based on very little information.?

“As for ‘catching out candidates’, yes an interviewer has a responsibility to check the facts but there is no excuse to do this by interrogation and rudeness.?Any company who wants to attract talent should ensure their interviewers are professional, precise and also represent the company (would anyone want to work for a company who values Claude’s interpersonal skills?).”

What do you think? Have you ever thought an interview was going well only for the interviewer to turn around and tell you otherwise? Or have you been let down by an interviewer who didn’t give you a chance to explain yourself?

  • Work & careers
  • The Apprentice
  • Reality TV
  • Television
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House prices rise by 2.6%

Thursday, June 4th, 2009

• House prices rise for first time since January
• Halifax says there are ‘tentative indications’ of stabilisation

House prices rose by 2.6% in May after three months of successive falls, according to figures published today by the UK’s largest lender.

Halifax’s latest snapshot of the housing market showed the annual rate of price deflation fell from a high of 17.7% in April to 16.3%. On its index the average price of a property stands at £158,565, around £4,000 more than in April but £25,000 less than last May.

The monthly rise, which follows three months of falls of between 1.8% and 2.3%, is even bigger than the 1.2% reported last week by Nationwide building society.

Halifax said there were “some tentative indications” that activity in the housing market was stabilising, but stressed it was important not to place too much weight on one month’s figures.

Nitesh Patel, the bank’s housing economist, said: “Historically, house prices have not moved in the same direction month after month even during a pronounced downturn.?

“For example, prices fell by 11% nationally during 1991 and 1992, but there were five monthly price rises in this period.”

The three-month figures, which are a better indicator of the underlying trend, continued to show a fall with prices dropping by 3.1% in the quarter to May. However, the rate on this measure has slowed since January when it was above 5%.

Patel said months of house price falls and low interest rates had made homes more affordable and boosted the number of first-time buyers entering the market.

Halifax’s house prices-to-earning ratio has declined from a peak of 5.84 to 4.36 in May, a level last seen in January 2003, while the proportion of disposable income a buyer needs to meet typical mortgage repayments had fallen to 31% by the end of last year – below the average of 37% recorded over the past 25 years.

Figures for March from the Council of Mortgage Lenders showed first-time buyers accounted for 40% of borrowers taking a mortgage for a house purchase – the highest percentage since April 2005 – while more recent figures from the Bank of England showed buyer numbers rose in April.

Buyers still struggling

However, although some lenders have increased the amount they are willing to lend in recent weeks, many buyers are still struggling to get loans and the numbers entering the housing market remain historically low, with the Bank’s figures showing mortgage approval figures down by 22% year-on-year.

Patel said: “House sales remain substantially below their long-term average and market conditions are expected to remain difficult with housing activity continuing at low levels over the coming months.”

Until demand for property increases, house prices are likely to remain volatile.

Howard Archer, chief UK economist at IHS Global Insight, said the figures were “an eye opener”, but he was sceptical that house prices have bottomed out.

“Significantly, it is not uncommon for there to be months of rising prices when house prices are still trending down,” he said. “Despite the robust Halifax and Nationwide data for May, we are sticking for now to our forecast that house prices will fall by another 10% from current levels to trough around mid-2010.

“However, we accept that this could turn out to be too pessimistic, particularly if the economy does start to grow in the near term and unemployment rises less than we fear.”

David Smith, senior partner at property firm Carter Jonas, said Halifax’s figures were “encouraging, but let’s not get carried away”.

“The economy is still far too fragile to talk of a sustained recovery in the housing market, but the hope is that we are past the worst,” he added.

  • House prices
  • Property
  • Housing market
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