6th February 2012

HOUSING CRISIS TO END IN 2012

I was very interested to read a report from Capital Economics indicating that they expect the American housing crisis to end during 2012.  The reason given is a loosening in credit (based on a reduction in the average credit score required to obtain a mortgage loan) and while the score is higher than pre-crisis levels, it is certainly coming down.  Other market indicators are also pointing not just to a stabilisation of mortgage lending standards but also a loosening of credit availability,  increasing the amount of loans available compared to earnings and banks also loosening value ratios.  Capital Economics believe these indicators will go some way to showing an improvement in the housing market, however, they are warning that there are still threats to future credit availability posed by the Eurozone.

I take this as a very positive report.  I believe that an improvement in the American economy coupling with the grasping of the Eurozone problems should signify an improvement in the UK housing market in particular and the UK economy in general.

I will continue to keep you advised of trends.

Lindsay Darroch
Partner and Head of Property

 

 

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