Property market is on the up, says Taylor Wimpey
Figures out recently confirmed that, after six consecutive quarters of contraction, the UK is finally out of recession. The state of the UK housing market was well documented during the downturn, with property prices, mortgage availability and Government rescue packages dominating the headlines.
But how did the industry really fare in 2009 and what does 2010 hold for the sector? Ian Thomson, regional managing director for one of the UK’s largest housebuilders, Taylor Wimpey East Scotland, reflects on the last 12 months and looks forward to what the next year might hold for those thinking of moving home or getting on the property ladder:
"There is no doubt that the last couple of years have been challenging for the UK property industry, but conditions improved considerably in 2009. We saw a return to a more stable market, with small incremental house prices rises, more visitors to our developments and an increase in our reservation rate of 37.5% on 2008. We have also seen a real return in consumer confidence, with a much lower cancellation rate in 2009 compared to the previous year.
"2009 certainly saw savvy buyers take advantage of lower house prices, record low interest rates and the wider range of practical and financial assistance schemes on offer both from housebuilders and the Government.
"This year sees the introduction of the ‘New Supply Shared Equity Scheme’ trial by the Scottish Government. It is part of the Governments’ LIFT scheme (Low Cost Initiative for First Time Buyers), and will run for the 2010/2011 financial year.
"Buyers’ stakes will be between 60% and 80%, with the balance of the purchase price funded equally between the Government and the developer. This is a 19 year Shared Equity agreement with an upper price limit of £140k aimed at first-time buyers. Taylor Wimpey East Scotland hopes to be able to offer this initiative on selected plots in the near future.
"Taylor Wimpey also saw a significant number of our purchasers take advantage of a range of our own schemes in 2009. For first time buyers, these included Easy Start, which enables buyers to own 100% of their home but pay for only 85% straight away, and Deposit Match, through which buyers can double their deposit, up to 10% of the purchase price, in order to secure a smaller mortgage and more competitive mortgage interest rate.
"Those moving house benfited from schemes such as Easy Mover which enables them to save on moving costs and get practical help in selling their existing house. Our part- exchange scheme also proved popular with those wanting to remove the hassle of selling their own home altogether.
"Figures out at the start of January painted a positive picture of the property market in 2009. The Bank of England reported that the number of mortgage approvals had more than doubled in the previous 12 months and net lending had increased for the third month in a row, both indiciators of increased activity in the housing market. The Council of Mortgage Lenders predicted that net lending on homes would double in the following 12 months from £8 billion to £15 billion and the number of housing market transactions are also expected to rise. According to Nationwide, average property prices rose by 5.9% in 2009 and the Halifax First Time Buyer Annual Review revealed that home affordability had improved significantly for potential first time buyers over the past year.
"Recent research published by Halifax also provides a stark reminder that property remains a good investment in the long term. Its figures showed that house prices had increased by 105% in inflation-adjusted terms over the last 10 years, the largest rise of any decade in the last 50 years.
"So what does the start of a new decade hold for the UK housing market? According to Nationwide, property prices rose by 1.2% in January, the biggest advance since August. The Centre of Economics and Business Research has also revised up its forecasts for property price growth in 2010 to 6%.
"The availability of competitive mortgage deals in 2010 will be vital for further improvements in housing market conditions and the fact that both Lloyds Banking Group and Santander have announced that a wider range of mortgages with a loan-to-value of 90% should become available over the next few months is also good news for buyers.
"Taylor Wimpey has made a good start to 2010. In the east of Scotland 30% of properties scheduled for completion in 2010 were reserved last year, as buyers bought early to take advantage of 2009 prices.
"We are now actively looking for new land for development and already have plans to open four new sites across the east of Scotland in 2010 including Dunbar and Harvieston Farm in Gorebridge.
"We have completed the conversion of our Bryant Homes and George Wimpey developments to the Taylor Wimpey brand, and will also be introducing an exciting new range of house designs in the coming months.
"Our focus will remain on providing the right homes in the right location as well as the right kind of financial and practical help that our customers need to get on and move up the property ladder in 2010."
