Safe as houses?

Never mind this week's earthquake, what about house prices?
Talk to housebuilders and estate agents (which I have been doing) and they’ll tell you that while the housing market is slow, they’re hopeful of an uplift in the Spring.
They’re in business, they have to stay positive. And let’s be fair - even though there is a spending downturn among consumers there isn’t a housing crash.
But it seems to me that the days when you might have put your home on the market and waited for the asking price to roll in are history.
It might still happen for a few people. But for most, buyers will bargain you down.
So prices are likely to stand still or fall back. Why? Because hard-up buyers and sellers feel less confident, and because bruised banks and building societies won’t lend mega-mortgages anymore.
Nationwide, the biggest building society, said this week that if you want to borrow more than 75% of the asking price then you’ll have to pay a higher interest rate. Expect other lenders to follow suit, if they haven’t done already.
Housebuilders are already seeing sales of new homes weaken. Hard-nosed buyers may conclude that a shiny new home with appliances and carpets thrown in is not worth a big price premium over an older property anymore. After all, washing machines and Wilton carpets won’t add anything to the property’s value.
A sales negotiator I got chatting to at a new homes development in a Notts village last week was very quick to talk discounts. So there may be deals to be done.
Nottingham’s flats and apartments are in a really tight corner. Not because they don’t make sense as places to live – in a city they clearly do – but because prices have been driven to silly levels by people buying them as investments. The city’s skyline is a monument to that.
Once again, you need to look at the value they have as places to park people in, not as places to park money.
So what will sell? Homes near good schools, because parents want a good education for their kids whatever the economy is doing. Homes that are energy efficient, because properties that leak heat are leaking money. Homes in good nick will do better than homes that need a lot of work - in a downturn, people will judge on cost first, potential second.
It’s the same with personal finances. The days of those insane 125% mortgages are over, and if your monthly income is already creaking under the strain don’t expect the bank to hand over a load more money.
Banks have got enough debt problems of their own right now. They won’t want yours as well.
One Nottingham property agent wrily told me the other day that house sales were now a product of the three Ds: debt, death and divorce.
Want he meant was that all the froth has gone out of the market – the ‘one up on the Joneses’ movers, the people buying property for profit.
What we’re left with is sensible people looking to make a sensible move to a sensible property at a sensible price.
Some will call that a slowdown. Others might argue it’s a return to sanity.