Property News with Bruce de Wert

The New Year is a traditional time for crystal-gazing and I shall do my best to give you an insight into what I think will be the main developments for property in the Far North in 2010.

First, a little background of the overall UK situation.

The major problem, currently, is that loans are difficult to obtain and so buyers are few. The prospects are somewhat mixed but, on the whole, improving.

Loans for house purchase agreed in November (the last to date for which information is available) are at the highest level since March 2008 and more than double the record low seen in November of that year, however, net lending is still at a level 40% lower than the long-term average before the beginning of the credit crunch.

In the Building Society sector, gross mortgage lending actually dropped from £1.7 billion in October to £1.6 billion in November, according to the Building Societies Association but that may have been due to the traditional Christmas lull.

It seems that there are prospects for an increase in loans provided but growth will be slow.

Adrian Coles, Building Societies Association director-general, said: "Lending activity is likely to remain relatively depressed in 2010 until funding and supply conditions improve."

The Bank of England's latest survey of credit conditions in the UK showed that banks plan to increase the supply of mortgages in the first quarter of the year as the outlook for the economy slowly improves.

This gloomy situation may surprise you when you hear that

house prices in the United Kingdom increased for the eighth straight month in December, according to the Nationwide Building Society.

The explanation lies in the fact the turnover of houses has been very low with very few buyers and sellers. As a result, some few cash rich buyers (who either don't need a mortgage or need only a low percentage loan) have been supporting the market and skewing the figures. My own experience is that there has been a considerable market in the sale of lower value properties, for cash, by people who want a place to park their money (which they have complained is, otherwise, earning negligible interest). There is a great deal of doubt in the economic community as to whether such buyers can continue that trend.

Many economists are, in fact, predicting price falls in 2010 as more properties come onto the market and tax increases, more unemployment, pay freezes and a sluggish recovery keeps our confidence to buy at a low level.

So what does this mean for you? As always, one must bear in mind that the Far North market is a market in itself. We have been used to seeing steady but moderate growth in property values because the North is a government funded economy and thus far we have been able to anticipate steady year-on-year increases in spending. Whoever wins the next election is going to have to rein in Government expenditure and this will limit hopes of a local house price recovery.

Nevertheless, I do anticipate that there will be a steadily improving situation of mortgage availability which will enable more and more houses to be sold, at realistic prices, as the year goes on.

The country property scene is slightly different. That is very dependent upon the English market. If that improves, we can hope to see an improvement. Roll on Easter, the time we normally anticipate English buyers arriving! I am keeping my fingers crossed.

In brief, the market is not good but getting better, If you would like any advice about your particular situation, do not hesitate to be in touch.

Bruce de Wert has 26 years of experience and is now Principal Solicitor and Estate Agent at Georgesons, Wick and Thurso.

Anyone who would like to comment or for this column to touch on any particular matter, please email me on bruce.de.wert@georgesons.co.uk.