The housing market is remaining in a weakened state and there seems to be little movement to help it get stronger.  Buyers are still kept away because lending approval is difficult or they are afraid to take on a mortgage only to see the value of the home decline with falling house prices.  There is also a lack of properties on the market as fewer new homes are being built and fewer homeowners are moving upward.  The majority of mortgage lending approvals continue to be those for remortgages over new home purchases. 

In response to the current housing market condition, Miles Shipside, director of Rightmove commented “Planning relaxation may help to boost housing market and economic activity in three or four years’ time, but it does nothing to help the market now. The continuing lack of attractive mortgage products with higher loan-to-value ratios is stalling a housing market recovery, as first-time buyers or existing homeowners with little or no equity are faced with years of saving to raise the necessary deposits. The risk is that the current turmoil in the financial markets, which would be exacerbated by a Greek default, could make lending criteria even tighter at a time when they appeared to be easing slightly.

“It’s a delicate balance between the markets not being flooded with sellers desperate to sell and having enough of them to bring prices down to more affordable levels and encourage more buyer activity. Although local markets vary, at a national level it still seems that sellers have the upper hand in being able to hold out for higher prices. Buyers can retaliate by not buying, but do not have the power to force many sellers to take lower offers. The result is a stalemate and continuing stagnation in the number of sales transactions and successful moves”.