MERSEYSIDE’S property lawyers last night agreed that recent rises in the property market could be a “false dawn”.
They laid the blame for a possible flattening of prices at bankers’ doors, whom they said are still not lending enough.
One associate also implored commercial and residential buyers not to “tie deals up in knots” and for purchasers and vendors to work together to weather the storm.
Their comments came after Ernst & Young yesterday tipped the recent upturn in the market to stall by the spring, and forecast a recovery to peak values only after another five years.
Philip Byrne, property associate at Brabners Chaffe Street, told LDP Legal: “Our residential developer clients are telling us the footfall in their show homes is back to pre-October 2007 levels.
“But the housing market is, for the first time in many years, presently being held back by a lack of mortgage products, which only cater for those who have significant deposits. In their view, the housing market can only recover if realistic mortgage products are made widely available to stimulate growth.”
EY said 56% of homeowners had a mortgage, so it would be difficult for there to be a sustained pick-up in the market without a recovery in mortgage lending. Its senior economic advisor Hetal Mehta said: “ITEM believes the current stabilisation in the housing market is a false dawn.
“Price rises largely reflect the acute shortage of available properties, with many homeowners either trapped in negative equity or reluctant to sell for fear of locking in the losses of the past two years.
“A small number of cash-rich buyers have supported prices, but the supply of these funds is limited, which means prices are likely to dip again in the first half of next year.”
Clive Bleasdale, head of Weightmans’ commercial property team, said: “While a small increase in prices has been reported and the market is busier, there is cause for caution due to concerns over mortgage lenders’ attitudes to new loans and where they will be priced – in spite of maintenance of the current level of base rates – coupled with concerns over unemployment.”
But Mr Byrne added: “Perhaps it is time to drop any adversarial posturing and work in partnership to weather this economic storm.
“Deals can and are still being agreed that represent good commercial sense in what need not be competing interests. Deals need to be tied down and not tied-up in knots.”
HOUSE PRICES FALL – LDP BUSINESS: PAGE 27
