On the plus side there is a steady appetite for the APF Auctions which seems to be having some impact on SWAP rates which are lower across the board except for a short session at the end of January. There will be a slowdown in activity over the next few days as everyone waits for the MPC announcement on Base Rate tomorrow and volumes ease in the run up to the double Bank Holiday weekend. In these interesting times, I am surprised that there hasn’t been a call for a different expression than Bank Holiday to cover these public holidays.
There is also improving evidence that property auctions are selling high percentages of properties at or above guide prices. But then if you’ve ever been in a Savills Auction with their top man, James Cannon, at full throttle you will know that he is the ultimate proof that you can sell ice to the Eskimos. But the evidence also comes from the likes of Allsop whose results are live on-line and you can even video stream the auction as it takes place – so much more fun than trying to get credit sanctions from lenders who are reluctant to take your call let alone underwrite a loan application.
In my last blog I mentioned the print industry and how it is an early indicator of recessionary trends. As chance would have it I had lunch with the sales director of a large print company at the weekend. The bigger issue for them is the cost of paper which is virtually all imported and has shot up in price by more than 50% in the last six months. His business covers a wide range of print areas and he is convinced that some very big print jobs are now happening at below cost which will drive more companies into receivership. So UK plc is catching up with the property and finance industries just at the point that we may be bottoming out – it doesn’t get much tougher than now.
Traditionally if there is good weather over Easter, the estate agents have increased viewings and sales follow – it would be nice if we had a steady and reliable range of mortgage products to help make those deals happen. So bring on Northern Rock with government money to push into the market and drive competition on lending margins – but more of that next time.