Now is the time to Self Build

Posted on January 16, 2011 by Builder Bob There have been 0 comments

Halifax’s House Price Index

Published last week Halifax expect limited house price movement in 2011.  Although it sees downside risks with some modest variations across the UK, they see the regional picture as possibly being impacted by public spending reductions.

New Homes Now More Affordable than for 25 years

With low interest rates having reduced mortgage debt servicing burdens, typical new borrower mortgage payments have fallen from a mid 2007 48%  of average disposable earnings peak, to 29% in the last quarter of 2010. This is better than the last 25 years long-term average of 37%.  It is an important factor supporting housing demand.

More Mortgages Approved

The Bank of England has reported that, after 6 successive monthly falls, the number of mortgages approved in November increased.  At 48,000, on a seasonally adjusted basis this was also the highest since July.  However, this was 19% lower than November 2009’s 59,000, mainly due to the stamp duty holiday on properties between £125,000 and £175,000 ending at the end of 2009.  This was considered to have boosted approvals during the last part of that year.

Prices Stabilising

Prices in the final three months of 2010 were 0.9% lower than in the previous quarter. This rate of decline is significantly less than the quarterly falls of 5-6% during the second half of 2008. House prices fell by 1.3% between November and December.

Interest Rates Set to “Remain Low”

Looking forward, Martin Ellis, Halifax’s Housing Economist, expects “ … interest rates to remain very low for some time”. In his view this will continue to support a favourable affordability position for those entering the market.  Additionally, this “… will also place only limited financial pressure on existing homeowners to sell”.

Fewer Houses on Market

Current signs are that homeowners are becoming more reluctant to sell.  If this continues it will “…help reverse the imbalance between buyers and sellers”. Nevertheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.

A Good Time for Self Builders

Given the above, together with Government’s encouragement of Self Build activity (see earlier post),this seems to be a very propitious time for Self Builders to find the land and build the house that suits their ideal requirements.


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