At the end of last week I was sent an article which suggested distressed house prices had reached the bottom and were now beginning to increase.

This was based on a report from Assetz, the property investment advisers group.

They reported that developers are starting to raise prices on distressed housing stock sales and that house prices at auctions also appear to have started to plateau since the New Year.

The reasons why they believe distressed sale prices have now reached the bottom:

• Many housebuilders are running out of completed stock
• Improvements in bank funding have allowed a number of developers to renegotiate their loans, which has avoided the need to sell at below cost.
• The recent falls in interest rates have significantly improved the position for homeowners on a tracker mortgage or on standard variable rate. This has reduced the urgency for a distressed sale.

Although they agree there will continue to be distressed sales, Assetz believe the huge discounts are now being moderated.

Has anyone seen any other evidence to either support or contradict this?

This entry was posted on Monday, February 2nd, 2009 at 11:25 am and is filed under property market general, property prices. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.