The signs say GO for house buying – just don’t tell the journalists, says Lawrenson of Letting Focus

House prices are down for the fourth month running according to the Nationwide. Their latest figures show a 0.5% drop in the month of February which leaves houses prices up 2.7% on an annualised basis
Just a word of caution, though, February 2006 was a strong month for houses price rises, so maybe that 2.7% growth figure looks a little worse than it is.
But notwithstanding that observation, it is clear that house prices are cooling a bit.
And as further evidence, the Land Registry has reported that the number of houses sold in November was 20% less than in November 2006.
Mortgage availability continues to get tighter too. As I sort of predicted in the last blog, other lenders have followed the Nationwide’s lead and are raising the amount that borrowers need to put in when they buy a property.
So, whilst, loans over 85% are still available they come at a much higher mortgage interest rate.
Of course, commentators who love to hate buy to let say, “Aha, all those landlords will have their come-uppance too from the new mean mortgage lenders”

Landord Default Rate is Low
The only problem (for these commentators) is that according to the Council of Mortgage Lenders buy to let borrowers still has a lower default rate overall than other mortgage loans, so landlord investors have not actually been hit as hard as ordinary residential borrowers by the tightening of lender’s criteria.
However, there has indeed been some tightening in buy to let lending – mainly on rent to interest ratios and on lending to borrowers who have a less than perfect credit history.
So, if you have a track record of investing in property and / or you have a good credit history and access to 20% of a property’s value, these are very exciting times.
Why?
Well, as lenders get meaner with who they will lend to, this is what will happen….
First, less people will be able to get mortgages to buy property
Second, the 1.4 million people have to re-mortgage this year may well end up paying a higher mortgage rate -and they may choose to sell their properties and rent instead.
Third, the tighter conditions and fewer buyers will cause house prices to slide - though this may not happen in earnest until around May. I predict house prices will be about 5% lower in December 2008 than they are now
Fourth, these conditions make it a great time to be in the market and buying property.
Why?
Because in a weak housing market, vendors will listen to offers and you will be able to get property at a good (i.e. low) price.
And because I think this year will be so good to buy property, I will be busy doing just that.
For that reason, and because of the demands of my consulting work, this blog will appear now just once a week.
However, we will endeavor to keep it as informative as ever.
If you need more advice on property investment or buy to let investment in general please ask me.
About Me
I’m David Lawrenson from property investment advisors http://www.lettingfocus.com/
I’m the author of the buy to let book “Successful Property Letting - How to Make Money in Buy to Let” the UK’s top selling property title.
I’m an expert on property investing for profit and a well known property freelance writer and I contribute to newspapers and a host of property websites, write a property investment blog, a number of columns in the press and run a landlords advice service.
I also work as a consultant helping banks, building societies, housing associations and web portals with their buy to let and property products and services.
You can read more of my property investment blog and details of my networking, advice, buy to let networking programme at my website http://www.lettingfocus.com/
Come to my next London landlords networking.
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What’s unique about lettingfocus.com is that we offer independent property mentoring because unlike most people in the buy to let and property “advice” business we are not linked to a property company, developer, agent or bridging loan financier and do not receive commissions from any of these sources.If a property investment is lousy – We’ll tell you straight and we will tell you all about buy to let and property investment - the good and the bad and we won’t make silly promises that you’ll become a millionaire overnight.Copyright: David Lawrenson 2007. This blog is updated at least twice a week. Permission must be sought before using the material in the blog.