The Government are soon to finalise the terms of their Repossession agreement which will prevent lenders seizing their security for up to 2 years.

It is these very properties that make up the calculated average house price in the UK.  If these properties, owned by people in financial trouble, do not get seized by the lenders then you really will see the housing market STOP.

Now I think this is a good idea.  I would not be saying this if I was an estate agent and this will really kill them.  However we do not wish to see people lose their homes due to temporary financial problems.

If you remove the forced seller from the market for TWO years then all you really have left are willing sellers.  Now what willing seller would want to sell now?  You will get the odd owner who wants to sell because they are moving or they can get their dream house at a bargain price but the majority of us will stay put.

Do not be fooled by the press about the buy to let landlord.  They only make up 10% of the market and only 900 properties were repossessed last quarter.  If I were really pessimistic lets say this figure grows by 10 times then we would see 9,000 properties come on to the market.

9,000 properties out of 20 million properties in the UK is a very small percentage. 

So when they calculate the National house price statistic which the news is fascinated by for some reason it will have very little relevance as it will be calculated from a very small sample size. i.e. around 9,000 properties per quarter or round abouts.

So sit back, let the government bully the banks in to lending and when they do make sure you have your cap in hand!

 

Ajay

Posted on: 5th Jan 2009