Press Release: 00063

12 March 2008

Building Budget Blues

Source: http://www.ukpropertyshop.co.uk

After years of easy money and relentless increases in property prices, the long awaited "credit crunch" has arrived. Maybe some sanity will now return to the housing market, allowing prices to settle down so that normal home-owners who need to move can buy or sell with reasonable certainty that values will remain fairly stable. Perhaps this will also give the lie to newspaper pundits who constantly talk up the market with the idea that somehow rising house prices are "good" and falling prices are therefore "bad", while at the same time getting exercised (and rightly so) if the price of bread goes up by a few pence. A person's home is not a commodity that can be traded for profit and very few people actually get to see any tangible benefit from house price inflation, unless you are selling up and moving to Timbuktu. On the other hand, higher house prices do cause real harm to first time buyers, who need to struggle more and more for less and less. Banks offering mortgages of 125% of the "value" of property only serve to drive up prices and ultimately make life more difficult for the very same customers they are trying to help.

In the meantime, property developers across the country are locked into building projects that have their own momentum, so thousands of new units will continue to flood onto the market in the coming months. With luck, prices may come down far enough for the banks to start offering sensible mortgages again. We need these new homes and it is essential that builders keep on delivering them, but if they lose confidence we could be in serious trouble.

And the final indignity is that so-called Stamp Duty, which is a government tax just like any other tax, still has to be paid by virtually all home buyers. The Edinburgh Solicitors Property Centre reports that 85% of properties come into the Stamp Duty threshold. Despite pleas by property professionals, the Chancellor abandoned first time buyers in his Budget, deciding instead to carry on taking the money. Which in practice means that even first-time buyers are forced to add £1,200 or more to their mortgage, so the tax is actually being paid with borrowed money.

Looking at the latest February League Table, it is apparent that interest in buying property is, quite literally, all over the place, with the most popular locations being Newcastle and the Isles of Scilly. Despite having all-time record numbers of visitors to the UK Property Shop website, it seems that most people are just window shopping right now and waiting for the right time to move. So the question is, how much longer?

Moving Location Index (Towns) - February 2008

Rank	Town	County	Points
1	Newcastle upon Tyne	Tyne & Wear	235
2	Isles of Scilly	Cornwall	170
3	Bath	Somerset	158
4	Brighton	Sussex	151
5	Jersey	Channel Islands	143
6	Oxford	Oxfordshire	133
7	Dundee	Angus	108
8	Inverness	Highland	90
9	Perth	Perth & Kinross	88
10	Hull	Yorkshire	85
11	Skegness	Lincolnshire	82
12	Chester	Cheshire	82
13	Eastbourne	Sussex	79
14	Lancaster	Lancashire	77
15	Aberdeen	Aberdeenshire	75
16	Leamington Spa	Warwickshire	73
17	Aberystwyth	Ceredigion	72
18	Sherborne	Dorset	71
19	Kendal	Cumbria	67
20	Penzance	Cornwall	66
21	Ayr	Ayrshire	66
22	Newcastle-under-Lyme	Staffordshire	64
23	Paignton	Devon	62
24	Bournemouth	Dorset	58
25	Weymouth	Dorset	57
26	Truro	Cornwall	56
27	Ormskirk	Lancashire	56
28	Stroud	Gloucestershire	53
29	Frome	Somerset	53
30	York	Yorkshire	52
31	Newquay	Cornwall	52
32	Bury St Edmunds	Suffolk	52
33	Shrewsbury	Shropshire	51
34	Portishead	Somerset	51
35	Catterick Garrison	Yorkshire	51
36	Isle of Arran	Scottish Islands	50
37	Peterborough	Cambridgeshire	49
38	Stirling	Stirling	48
39	Exmouth	Devon	44
40	Dorchester	Dorset	43
41	Burton-on-Trent	Staffordshire	43
42	St Andrews	Fife	43
43	Leyland	Lancashire	43
44	Thornton-Cleveleys	Lancashire	42
45	Dumfries	Dumfries & Galloway	41
46	Kingston upon Thames	Greater London	41
47	Elgin	Moray	41
48	Barrow-in-Furness	Cumbria	41
49	Wimborne	Dorset	41
50	Greenock	Inverclyde	41

Note for Editors about the Moving Location Index and UK Property Shop

The UK Property Shop Moving Location Index is based on data from a sample of people looking to buy a property and using the website to register their property search requirements with estate agents in each town. From this data a score is calculated according to the number who are considering either moving within the town where they live, or away from their home town and into another town. The Moving Location Index is not a measure of quality, simply an indication of the relative proportion of home buyers wishing to move into or out of a town, which is influenced by many factors.

The UK Property Shop website www.ukpropertyshop.co.uk was launched in 1999 and is a popular source of information for people looking to buy, sell, rent or let residential property in the UK. It also publishes the National Directory of Estate Agents, the most complete and up to date register of all UK estate agents and letting agents.