Stephen Hester the new chief of RBS made a speech to the property industry and said “We intend to play a long game in helping customers work through their debt issues”. Many commercial property investors financed their purchases at the top of the market and a lot of this debt is due to mature in 09/10. Many of these loans will breach their covenants on the loan to value ratio clause as the capital values will have fallen due to the massive downturn in the commercial property sector. Invetors and owner occupiers could be asked to provide a cash contribution in order to decrease the loan to value ratio so they are no longer in breach of their loan covenants. Even if the property is producing a healthy rental income where it easily services the debt, investors have said that banks are still putting pressure on them to provide a cash contribution. RBS have commented that rather than foreclosing on these loans it will work with commercial borrowers. This has come as a welsome relief to many commercial landlords.

According to smartlandlord.co.uk their analysis reveals that rents may have stabilised as pressure from rental properties has increased.

Bargain hunters and first time buyers are been tempted back into the residential market. Many commentators have even called the bottom of the market. But the ratio of household income is still very low compared to house prices. The other argument is that due to the strict planning system in Britain, there is a major shortage of houses which will push prices up.

According to the Halifax price index, during the month of May house prices rose 2.6%. Nitesh Patel at Halifax not to attach too much importance to one month’s figures. Estate agents have commented that as the housing market is in recovery, for the next few months we will see prices going up and down until the market fully stabilises.

According to the Nationwide Consumer Confidence Index, there was a two point rise in the index. Although this is only a very small change it does translate into consumers feeling slightly more secure.

The credit rating agency Moody has publised data that reveals there has been a jump in the first quarter of this year of arrears of ninety days or more. This reflects that fact the high level of unemployment and redundacies has led to people not being able to keep up with the repayments on their mortgages. Consumer spending may remain weak until people feel confident about job security and capital values on their houses.

According to the Building Societies Association (BSA) building society mortgage approvals were 14% higher in April than in March. With overall building soceity lending starting to stabilise this further creates confidence in the market helping to improve capital values in the residential market. Although lending levels are some 60% below than last year, there are now strong signs that the credit conditions are improving albeit at a slow rate.