Chocolate Fireguards

Today’s figures from the Halifax once again demonstrate how behind the times surveys from Lenders and the Land Registry are. They’re about as much help to both house buyers and sellers as a chocolate fireguard.

Those actually involved in buying and selling day-to-day have been concerned for months but lenders have been slow to admit to the reality. The Nationwide only revised their predictions downwards in the past few weeks and other mortgage providers have been equally mute to what is really going on.

The Halifax survey gives us the housing market equiverlant of a weather forecast for 1987. Based on mortgage advances made during March, the lender who just this week raised their own lending criteria and the rates for new borrowers have informed us that prices fell 2.5% in the month. The Land Registry who provided their figures for February just last week saw things differently. Both are based on historic events.

The Land Registry suggested that prices in the West Midlands rose 1.3% in February and yet Halifax says that prices here fell by 5% in March. Anyone thinking of selling in the Black Country are going to be totally confused. In fact, we have seen agents trying to give objective advise since Christmas and they have been adjusting asking prices accordingly.

Lenders have run for the hills in recent months withdrawing products, ignoring the Bank of England base rate and hiking arrangement fees to make getting a mortgage harder than at any time since Black Wednesday. Until lenders get back into the market and start offering mortgages again conditions will continue to deteriorate. Even if the base rate is dropped on Thursday as is widely expected, the gap between it and 3 month Libor (the rate at which banks lend to one another) will be the same as it was a week ago. Those of us involved in the current market know that just how tough it is now and we must expect these historic surveys in the months to come to reflect this.