propertytalk Live!

Beyond the political and economic fallout of the Greek debt crisis and turmoil in the government bond markets in Europe, real estate investors are pondering the implications for the property sector.

A new report by CB Richard Ellis – which considers whether increases in government bond yields in a number of European countries will negatively impact property market recovery – suggests that the measures taken to restore public finances have the most potential to impact the real estate sector in the short to medium term, but that these impacts are more remote than might be expected and most likely to affect secondary property rather than prime.

More help to save energy will be available to householders due to an increase in the Government’s Carbon Emissions Reduction Target (CERT) scheme and the introduction of a new Community Energy Saving Programme (CESP).

Together, CERT and CESP will see extra investment by energy companies under the two schemes, taking the total to an estimated £3.5billion in energy efficiency improvements by the end of 2012. According to the Government this will help the country meet carbon targets under the Climate Change Act, as well as help meet fuel poverty targets.

Many parts of the UK’s financial services sector expect business volumes to rise in the next quarter after 21 months of falls, while optimism about the overall business situation has risen for the first time in two years. But banking remains under pressure.

That is according to the latest CBI/PricewaterhouseCoopers Financial Services Survey out yesterday.

One in 10 UK homeowners were in negative equity during the first quarter of the year, according to the latest research by the Bank of England.

The Bank estimates that between 7% and 11% of homeowners with a mortgage owed more to their lender than their property was worth during the first quarter, the equivalent of between 700,000 and 1.1 million households.

In addition, around 200,000 buy-to-let investors are also estimated to have owed more on their mortgage than their property was worth.

The research said the overall number of people in negative equity during the first quarter was similar to those who suffered from the problem in the mid-1990s, during the last housing market correction.

The Bank of England’s Monetary Policy Committee today voted to maintain the cost of borrowing at 0.5%.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009.

Tory Shadow Housing Minister Grant Shapps has warned Labour’s Mortgage Rescue Scheme "is failing" after it was revealed only two families have been helped in the first four months.

The £285 million scheme, intended to help 6,000 of ‘the most vulnerable families avoid repossession’, has provided assistance to just two families. At that rate, it will benefit only 12 homeowners over its two-year lifespan.

The number of people living in overcrowded homes in England will soar by 15% to 2.6 million within two years as unemployment and repossessions increase during the recession.

The National Housing Federation, which represents England’s housing associations, said an extra 350,000 people would be forced to live in cramped and unsuitable conditions by 2011, leading to widespread problems with health, children’s education and damaged family relationships.

Quantitative easing is the best solution to salvage the UK economy – but the Government’s "dribs and drabs" approach is too slow, according to property website www.look4aproperty.com.

CEO Aaron Turner said: "Money needs to be put into the economy in much larger amounts and not in dribs and drabs of £2billion at a time.

Consumers believe it will be at least a year and a half before the economy improves, according to new research by Which?

With four in five people believing it will take at least a year and almost a quarter (23%) saying it will be more than two years before we see an upturn in the economy, it seems consumers are not expecting a quick recovery.

A former Chief Economist of Europe’s largest Bank HSBC is forecasting that the UK will remain in recession until at least 2011 and predicts the housing market will continue to struggle with rising repossessions, growing negative equity and poor access to finance.

Speaking at the Chartered Institute of Housing South East’s Annual Conference and Exhibition in Brighton, Roger Bootle, now managing director of Capital Economic, suggested that around 3.5 million households would fall into arrears – twice the level of the early 1990s - and mortgage repossessions could rise as high as 90,000 this year. He forecast that the economic downturn would be the worst since the post-war economic slump of 1945-48, and was only likely to recover from 2011 at a very slow rate.