Finance Matters

Posts Tagged ‘slump’

House sales fell 1 per cent in 2011, with just 869,000 residential properties sold, according to HM Revenue and Customs (HMRC).

In January 2011, traditionally the weakest month for property transactions, just 45,000 houses were sold.

However, the market did improve at the end of the year, with 76,000 sold in December.

The property market has been in a slump for the last three years, with high inflation, high unemployment and stringent lending criteria making it impossible for many people to afford to buy their first home or move house.

Many first-time buyers are unable to raise the high deposits demanded by mortgage lenders, leaving them trapped in expensive rental properties.

Property sales in 2011 were around 50 per cent lower than they were in 2007, prior to the onset of the credit crunch and were nearing the record low level of 2009, when just 848,000 homes were sold.

The Council of Mortgage Lenders expects total lending to fall again in 2012, suggesting a further fall in house sales is likely.

Official figures released last week by the Department for Communities and Local Government (DCLG) revealed house prices fell by 0.3% in the year to November 2011.

The average UK house price ended the year at £205,796.

However, house prices increased by 0.7 per cent for first-time buyers and the price of new properties increased by 7.7% on average, compared with 2010.

The DCLG’s figures also indicated that the North/South divide in house prices is widening, with the North West experiencing the largest fall in property prices while the smallest was in the South East.

High inflation and rising unemployment are expected to lead to a substantial increase in home repossessions this year.

The Council of Mortgage Lenders expects a 22 per cent rise in repossessions in 2012 to 45,000.

BEIJING (AP) — China’s import growth decelerated sharply in December in a new sign the world’s second-largest economy is slowing.

The customs agency said Tuesday that December imports rose 11.8 percent over a year ago, down from November’s 22.1 percent gain. Exports rose 13.4 percent, down only marginally from the previous month’s rate.

The country’s politically sensitive global trade surplus widened to $16.5 billion.

Weaker Chinese demand for imports reflects a slowdown in rapid domestic economic growth after Beijing tightened lending and investment curbs to prevent overheating. A slump in global demand for Chinese goods has prompted the government to reverse course and promise measures to shore up growth.

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See Also:

• China’s Central Bank Is Promising Pro-growth Policies For This Year
• 10 Things You Need To Know This Morning
• Are We About To See A Fiscal Policy Game-Changer In 2012?

If the Eurozone doesn’t go into a deep recession in 2012, that would probably count as the first black swan of the year.

Okay, purists might not think this rises to the level of “black swan” — maybe it would just be a “surprise” — but given the assumption that the best case scenario in Europe is a prolonged, deep slump, anything that’s not horrible would be huge, positive, and unexpected.

So far we’ve just gotten a few hints.

Germany’s unemployment rate continues to plummet. U.K. PMI has beat expectations, and a string of positive PMI numbers from the BRICS support the idea that the wheels aren’t falling off the global economy.

Needless to say, it’s still super-early to be making any predictions, but be on the lookout for this wildcard.

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See Also:

• EUROPE: This Is What Will Happen In 2012
• EL-ERIAN TO IMF: Stop Kowtowing To Europe
• BlackRock’s Bob Doll Makes 10 Predictions For 2012

There’s tension brewing between Britain and France in more ways than one on the UK’s front pages tomorrow. 

Of course, most of this tension revolves around the Eurocrisis, with France arguing that Britain should get a credit downgrade before the French do. The Telegraph and Independent both have with the story, the latter using it in its business section.

The Guardian chooses to focus on the IMF’s warning of a 1930s style slump in trade. 

Elsewhere, the Daily Mail puts a different spin on the feud between the France and Britain by mentioning that a manuscript written by Charlotte Bronte will be going to a French museum, after it outbid an English establishment to house the artifact, though this 

Additionally, the Daily Mirror has a story about a pensioner who got lost on one of the UK’s busiest highways. For two days. 

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See Also:

• EU Continues To Dominate Britain’s Front Pages
• The UK’s Deputy Prime Minister Vents His Frustration On Britain’s Front Pages
• British Broadsheets Turn Front Page Attention To James Murdoch

Difficulty in securing mortgage finance and a slump in house sales is bumping up demand in the market for rented accommodation, but a new report warns that lettings agents’ fees are also soaring.

Tenants may have to pay £2,000 upfront to move house according to independent thinktank the Resolution Foundation.

As well as a deposit and rent in advance, a range of other fees are being charged including administration, deposit administration, credit reference, check in and check out, and tenancy renewal fees.

These fees are often not advertised in advance, leaving tenants having to pay significantly more than they anticipated.

Prospective tenants in London are particularly badly-affected by high fees and in its ‘Renting In The Dark’ report, Resolution Foundation suggests that total upfront costs to rent a one-bed property in London could amount to nearly £2,200.

In contrast, the fees to rent a similar property in Gloucester would be around £1,100.

The Resolution Foundation is calling for the private rental market to be more tightly regulated, bringing it up to the same standard as estate agents.

Vidhya Alakeson, the foundation’s director of research, said: “We need more transparency so tenants at least know what fees they are facing and to help create a more competitive market”.

The foundation also wants lettings agents to be required to sign up to an ombudsman service in order to protect tenants.

Christopher Hamer, The Property Ombudsman, said: “The Government does not see regulation of the sector as a priority and I, therefore, welcome the recommendation of this report that all letting agents should be required to be registered with an ombudsman scheme so that, at least, landlords or tenants can gain redress where they have been disadvantaged by an agent.”

According to the latest residential lettings survey from the Royal Institution of Chartered Surveyors (Rics), rents rose for the seventh consecutive quarter in the three months to October, with rents in London increasing at the fastest pace.