What next? House prices in 2010

What happened in 2009?

A number of institutions chose not to publish a house price forecast for 2009, and in light of developments that has proved to be a shrewd move. Contrary to the consensus view of a double digit retraction in house prices in 2009, average prices ended the year 5.9% higher compared to the end of 2008 (Nationwide HPI), primarily because of a reduced number of properties being put on the market.

The supply of properties for sale contracted throughout 2009 as would-be sellers opted to sit tight until the market stabilised. The number of forced sales was also relatively low due to the Bank Rate being cut to an unprecedented 0.5%. In addition, house building activity continued to reduce which further restricted the number of properties coming to market. The demand for properties rebounded, and despite a severe reduction in the availability of mortgage finance, cash rich ‘prime borrowers’ were still able to secure financing. As confidence slowly returned to the market and mortgage availability improved to some degree, an amount of ‘pent up demand’ was released, helping house prices to rise.

Forecasting House Prices in 2010

House price movements in 2010 are equally difficult to forecast as they were in 2009. The UK economy is slowly moving out of a period of recession and consumer confidence remains weak. Consequently the housing market will remain very fragile over the coming 12 months until sentiment improves and market conditions stabilise. The average house price forecast is for a 1 percent reduction in prices by the end of 2010, however some analysts predict even greater falls, of up to 10 percent. Others, however, predict rises of up to 6.5%.

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Lord Myners welcomes BSA member engagement report

Lord Myners, the Financial Services Secretary, warmly welcomed a BSA report on member engagement at building societies.

Speaking at the Parliamentary launch of the report, the Minister said:
“The ‘raison d’etre’ of mutuals, and building societies in particular, makes the member, rather than the shareholder, the top priority. For building societies the rhetoric rings true – member engagement is not a means to an end – it is the end.

“Today’s report highlights several examples of this, such as greater interaction and feedback with members using innovative and approachable techniques. These stand as a testament to the mutual model. Active members can contribute a great deal to societies' growth and success.”

The report, Conversations with Members, looks at how member engagement has changed in the current economic climate, how societies are encouraging members to get involved, the mechanisms for encouraging feedback, corporate governance, and how societies make sure that member comments are acted upon.

Conversations with Members can be downloaded here

Lords Myners’ full speech can be viewed - here

Society News

 Hanley Economic Building Society wins top accolade

Hanley Economic Building Society is celebrating having won The Midlands Excellence Award awarded by Investors in Excellence at their regional awards ceremony in Birmingham at the end of January.

This year's prestigious award was presented by Olympic rower, James Cracknell and rewarded The Hanley for its journey of development and continuous improvement through the EFQM Excellence Model over the past 3 years.

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BSA welcomes new Associate

LSL Property Services Limited has joined the BSA as an Associate

LSL is a residential property services company providing a broad range of services including surveying and estate agency.  To find out more about them, visit their website www.lslps.co.uk

Arrears and Possessions Seminar: Solutions for Lenders
23 March 2010, Loughborough

This year will see changes to regulatory requirements that will have significant implications for lenders, a continuing focus on maintaining forbearance, and further capacity issues affecting the free money advice sector. At this seminar industry experts will present their views on the outlook for the year ahead and how lenders can achieve effective arrears management while ensuring that customers are treated fairly.

To secure your place, visit www.bsa.org.uk/arrearspossessions.