No improvement in housing market anticipated yet

As the latest forecasts for the housing market in 2011 from banks and building societies filter through, and the announcement of lending figures for December 2010 hit the headlines, it would appear there are still opportunities for landlords prepared to buy properties and back up their purchases with landlord insurance.

House prices dropping

Once more a building society, this time Nationwide, has announced that real estate prices dropped in December. According to their figures, it is the fifth drop recorded in the last seven months and if things continue the same into 2011 then the average house price in the UK will drop to below £160,000 for the first time in years.

Nationwide anticipate that house prices are most unlikely to rise in 2011 simply because there is no good news on the horizon. The current situation is not going to prompt any but the brave and needy to go out and risk buying property even though cheap property insurance can still be found. Plenty of hidden signals in that announcement for those who actually are brave enough then!

At the same time as Nationwide announced their gloomy forecast for the coming year the Bank of England (BoE) and the Council of Mortgage Lenders (CML) came up with some pretty eye opening figures themselves.

Mortgage uptake at its lowest

Figures released by the BoE show that borrowing, specifically for mortgages, in 2010 was just £8.15 billion. This was the lowest yearly total recorded since records began and was down massively on 2009 totals which themselves were poor. To compound the miserable set of figures, in December 2010 people paid back more than they borrowed and this is only the third time this as happened while records have been collated. At least George Osborne’s message about tightening our belts seems to be getting through.

The CML chipped into the misery basket by announcing that mortgage approvals dropped by 10% in December 2010 to just over 42,000 the worse figures since the depths of the recession in early 2009.

Can landlords profit from the situation?

In every situation there are winners and losers. Many landlords are seeing the value of their properties go down, but that is being countered by the strong demand for rental accommodation and the consequent high rental rates being achieved. As for those looking to expand, well the aforementioned state of the market means there are bargains to be had almost anywhere in the UK. The secret for landlords is to back up their business with good landlord insurance and make the most of excellent opportunities.

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