House Prices fall at fastest rate since 1990's.
March saw house prices fall at their fastest rate since the 1990's as the credit crunch continued to take its toll on the market.
Britain's biggest lender Halifax said the average cost of a home dropped by 2.5 percent during the month, the biggest monthly fall since September 1997 & the second largest drop ever.
Annual house price growth also slowed to just 1.1 per cent, this is the lowest level for 12 years, meaning that property prices are now falling in real terms on an annual basis.
Following the housing data released at midnight on Monday trading started with sterling down against most all major currencies, with a drop of 0.8 percent against the Euro & USD.
It continued to fall throughout the day with the low of the day showing a slide of 1.5 percent of GBP v EUR however the day finished slightly higher at a drop of 1.35 percent.
Losses were extended as the Bank of England detailed a widely trailed plan to lend banks up to 50 billion pounds to help them operate during the credit squeeze but some analysts were sceptical about how well the plan would work in easing credit market strains that have persisted since last August.
"I'm not sure how effective it will be" says David Pais, currency strategist at Citi Group. "The UK mortgage market rolls over 350- 360 billion will help but it's not going to solve the problem"
News of the plan did initially help lift the pound from record lows against the euro last week and some strategists were still optimistic that sentiment could turn positive.
Paul Robson currency strategist at RBS Global Banking said. "The Chancellor made it clear that he is set to free up the mortgage market and this should be positive for the pound".
What does this mean to you the buyer?
If you were buying a 200,000 euro property, there is a difference of approx £2400 between the start of business yesterday & end of business yesterday. This is a lot of money for anyone to just lose and in today's uncertain economy, it is a lot extra to have to find for that property completion.
This is just one example of how volatile the market is. One method Foreign Currency Direct can help avoid such pit falls would be securing your funds today on a forward contract.
A forward contract allows you to lock into a favourable exchange rate for currency that you require in the future. For the euro you can secure rates for up to 2 years in the future.
You are only required to put down a small deposit & the balance is only required on maturity of the contract (being the date you fix forward to). So while you fix the exchange rate for all your funds you only part with some of the required sterling allowing you to earn interest on the remaining funds in your bank account.
Why not speak to one of FCD's dedicated account managers today for further information about securing a rate today.
With the BoE minutes out on Wednesday at 9.30am this will give further insight to the BoE monetary policy going forward and the recent decision to cut interest rates.
For example if there is a 9-0 vote to cut rates & 1 person was to vote for a 50 point cut this may indicate a possible chance for further interest rate cuts in May. Historically this has led to the pound weakening as markets price in a cut.
And Finally:
Hello Kitty, a popular cat character in Japan, is set for a designer makeover in the June issue of Japanese Vogue.
The fashion spread will show Kitty modelling the latest autumn and winter designs by John Galliano for the Dior brand, posing with the designer and enjoying a shopping spree in Paris.
"Japanese animation and characters have been a strong influence on the fashion world in the last few seasons, but Kitty is special," the official said. "Fashion people all know her name and face and always say they love her. That's why we at Vogue wanted to do something involving her."
So if you are like me and would rather see Kitty strutting her stuff down the catwalk dressed in Dior than bob the builder why not visit www.propertyline.co.uk & find your dream home and be the first to get invited to all the up & coming fashion events from Paris to Japan.
If you have any questions regarding this report, or wish to discuss an upcoming requirement with an experienced broker that will talk on your level, please email me at djw@currencies.co.uk providing a telephone number and i will get in touch straight away.
Have a great day and thanks for reading!
Daniel Wright
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