I'm going to party like it's 2009!

Well here we are in 2009 and as hoped we are seeing buoyant news. I appreciate there is still a lot of negative press being banded about but as an eternal optimist I can still see reasons to be cheerful. It seems some people have followed my lead and made resolutions to become more optimistic or even positive in 2009 and here’s a few.

I was reading my local free paper over Christmas and they had a big spread on Bristol failing to meet its government target for new houses. According to the National House Building Council (NHBC) just 238 new houses were started during the last quarter of 2008 and this represents a 61% drop year on year. If this low level continues (and having spoken to a number of developers it probably will) it would take 123 years to meet the government’s target of 117,000 – originally set to be completed by 2026. Nationally we need to build 270,000 houses a year to meet target and last year only 100,000 were registered so this is not just a problem for West Country folk.

This is great news as supply is going to be dwarfed by demand and this should bottom out house prices in the very near future.

This sentiment was echoed by the Halifax as they announced our houses all lost an average of 16.2% of their value in 2008. Hidden at the end of the message and in smaller font than the rest was the fact that the quarterly drop of 5.2% was similar to the previous 2 quarters so prices may be stabilising. Estate agents are also registering more new applicants for the first time since October 2006 and the number of agreed sales is the highest it has been for 18 months.

No one was surprised to hear the house price to earnings ratio, a key affordability measure,  is at its lowest for five and a half years at 4.44 but when you consider its peak was 5.84 in July 2007 it is quite encouraging. When the recent interest rate cuts and energy price cuts really kick in we could see this figure sub 4 and then everybody can afford a house – so long as they have a big deposit!!!

Next positive on the first day back was Barnett’s solicitors announcing their housing survey results and 52% of the 4,000+ people polled expecting house prices to start rising within 12 months and 30% of those believe they will rise from the summer of 2009. Only 23% of the poll suggest 18 months or longer for recovery.

And finally Royal Institution of Chartered Surveyors (RICS) have stated that property prices may have already bottomed out and could rise by as much as 10% in 2009. They have also noticed that investors are returning to the commercial and investment property arenas and this is normally the first tell tale sign that the corner is being turned.

All we need now is for the HBOS/Lloyds deal to be put to bed so the shackles will be removed from these, the nation’s favourite lenders. The competition to lend against rising property prices will be great for all and we may even see some exclusive deals. Then, if lenders suddenly realise that they are not going to be saddled with a high percentage of new builds in their books (as they simply aren’t being built) we could reasonably expect lenders to have renewed appetites for mortgages on new builds and the set complete.

I am sure the lid will be kept tight shut on some of the crazy lending schemes we saw a few years ago and margins for higher risk lending will be maintained – all good news for all. So let’s get excited about hitting the bottom of the property prices and look forward to a great yet sensible 2009 in the mortgage arena.