Back to the future?
The latest Land Registry stats show House Prices in Wolverhampton back to levels last seen in 2005. Add in inflation and the real cost is even lower. In 2005 the market in Wolverhampton and roundabouts was functioning well with healthy transaction levels. So with prices in real terms less than they were in 2005 and mortgage rates even cheaper you would expect transaction levels to have bounced back by now. Regrettably not. Year on year sales volumes show a startling picture with 2010 mustering up a paltry 477 sales to April against a healthy 873 for the same period five years ago. Why is this so? Once again the answer lies in the availability of credit. In July 2005 you could get a 5 yr fixed mortgage rate at 4.64% with a deposit of only 5%. To get anything like that deal now you would need to find a thumping 20% deposit. This is too much for many people who would like to trade up let alone first time buyers. Next year will likely see a further squeeze on mortgage lending plus tougher affordability tests so we may have to look back a long way to see what the future holds for the housing market.
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