Legal & General: RICS' April housing survey

Ben Thompson, Mortgages Director at Legal & General asks if we are heading to the ‘trough' soon: "There is evidence that first-time buyers are increasingly interested in getting on the ladder, but this will not translate into actual sales whilst this group believes that prices have further to fall. Measures such as the Nationwide Consumer Confidence Index indicate that consumers still think that prices will fall over the next six months and as long as this remains and the labour market remains weak, house prices are not going to pick up significantly.

"The mortgage market is changing rapidly and potential first-time buyers are being forced to save considerable deposits in order to get a mortgage. Moneyfacts recently reported that there are just 71 products available at 90% LTV whereas six months ago it was over 200. So, it seems that people want to buy but they are either unwilling or unable to. This all adds up to a lot of pent-up demand, which could release quite quickly if the economic conditions become more favourable.

"There is growing market confidence that the US economy is stabilising and that growth in other countries is bouncing back more quickly than expected. So, whilst it's difficult to argue that the worst of the recession is over just yet, you could certainly say that we could be rapidly heading for the trough. Hang on tight for the upswing as it could be coming soon!"