Property Green Shoots
by Ritchie Mehta (30 April 2009)
According to Hometrack, property prices have fallen at the slowest rate for a year. In April the UK housing market declined by a mere 0.3%. The big question is; is this a green shoot or a sign of full-scale recovery?
When one turns across the Atlantic, house prices continue to decline however they too are showing positive signs. According to Standard and Poor’s home price index, American house prices reported a drop of 2.2% in April, which represented the slowest decline for 16 months. Perhaps a coincidence but may well be a sign that recovery is on the horizon.
One of the major trends that have occurred on the back of falling house prices has been the surge of rental properties on the market – so called ‘accidental landlords’. However, the combination of increased rental properties and a lower base rate has meant that rental income has fallen in the UK. According to Findaproperty.com the average rent in April was £819 a month, compared to £873 a month a year earlier.
There have been some signs that more homeowners are beginning to take their properties off the rental market and opting to sell. According to the Findaproperty report, the number of houses available to rent has fallen for the second month in a row. This is encouraging news for the housing market as a sign that people are gaining greater confidence in the market.
However, it is certainly difficult to know whether these positive signs are in fact a recovery or as some commentators suggest are just green shoots in the downturn.