House prices rise in 2013 – but not for the whole country

 

There has been a small average increase in home prices, according to latest figures from both the Land Registry and Nationwide Building Society.  

The Registry’s figures, which are based on completed property sales, show a monthly price increase of 1. 0 per cent for January. This brings the average house price in England and Wales to £162, 441.

This apparent increase does not apply in all areas - there are wide variations across the country, and even within regions. For instance London generally saw a positive monthly price change of 2. 5 per cent, with an annual increase of over 7 per cent. But within the London area some boroughs saw a drop in prices during January. The London Borough of Havering, which has a substantial commuter population and a wide range of residential properties, was worst affected with a fall of 0. 7%.

Outside London the general upward trend has continued in most areas, with only Yorkshire, the North West and the East Midlands still experiencing declining prices.

Concern over the volume of sales – but signs of an upturn

Although this looks like better news for anyone trying to sell a home, the Registry’s figures also point out a worrying decline in the overall number of completed property transactions towards the end of last year. From August to November 2011 the average was 61, 595 sales per month, but in the same months a year later the figure was down to 58, 947.

But it does appear that there has been an upturn in the market over the last few weeks. The Registry’s figures lag behind current property sales, as they only reflect transactions where an application for registration of a property transfer has been lodged. There are often delays in submitting applications, and the Registry has no information about sales currently in progress.

The Nationwide Building Society’s Chief Economist, Robert Gardner, sees signs of greater activity in the housing market. Commenting on the latest house price figures, he said:

"While activity in the housing market remains subdued by historic standards, there have been tentative signs of a pick up in recent months. The Funding for Lending Scheme has achieved some success in bringing down mortgage rates, with encouraging signs of an improvement in credit availability.

"While the economic backdrop remains challenging, there are reasons for cautious optimism that activity will gather momentum in the months ahead. In particular, employment is rising at the fastest pace since the late 1990s which, if maintained, should help support demand for homes. ”

Buyer confidence is likely to remain fragile until there are firmer signs of wider economic recovery.  

Wider availability of mortgage finance is encouraging

One encouraging recent trend has been the wider availability of mortgage finance. While most people would probably not welcome a return to the days when lenders were prepared to give money to anyone, seemingly irrespective of the risk of default, there is no doubt that the difficulties of getting a mortgage over the last few years have deterred many potential buyers.

Recent initiatives, including the government’s Funding for Lending scheme, have helped make more money available. Interest rates remain historically low, and there are some signs that lenders are increasingly willing to lend a higher proportion of the value of a property. There are also some creative mortgage products now available to help buyers, especially first-time buyers, and lenders are also returning to the buy-to-let market.

A healthy housing market is a very necessary part of a thriving economy, and while the latest figures are encouraging, the market remains fragile. The government must continue to take steps to encourage this growth – not just for first-time buyers of new-build property, but for the whole market, and across the country.

 


by admin
Monday 14th of September 2015 09:34:29 PM