September’s Land House Price Index indicated a 0.7% increase in prices for the year, but there was no change in prices from July to August. London saw the greatest gains over the past year ending September while Wales suffered the largest falls, which helps explain the average state of neutral movement in the United Kingdom (UK). Sales remain fairly active in the country, in part due to more participation from first-time homebuyers who are managing to take advantage of available mortgages. Even so, experts agree that more effort needs to be made to help new buyers enter the market. For more on this continue reading the following article from Property Wire.
There was no change in house prices in England and Wales from July to August, according to the flagship index from the Land Registry.
The average house price in England and Wales is now £163,376 and over 65,400 residential properties in England and Wales were lodged for registration last month.
The August data from the Land Registry House Price Index published today (Friday 28 September) shows an annual price increase of 0.7%.
The region in England and Wales which experienced the highest increase in its average property value over the last 12 months is London with an increase of 5% while Wales experienced the greatest annual price fall with a decrease of 3.2%.
The North East experienced the greatest monthly rise with an increase of 0.8% while Wales also saw the most significant monthly price fall with a decrease of 2.4%.
The most up to date figures available show that during June 2012, the number of completed house sales in England and Wales decreased by 3% to 56,077 compared with 57,702 in June 2011.
The number of properties sold in England and Wales for over £1 million in June 2012 increased by 35% to 647 from 478 in June 2011.
Richard Sexton, director of e.surv chartered surveyors, said that an ambience of real, albeit cautious, positivity surrounds the housing market at the moment.
First time buyer lending is beginning to increase and the mortgage market is staggering slowly towards recovery. House sales have increased marginally thanks to improving mortgage lending, and have dragged annual prices up on their coat tails,’ he pointed out.
‘These are tentative steps on what will be long road to recovery. It will be littered with obstacles, not least the huge roadblock that the Eurozone crisis represents. The Funding for Lending Scheme has palpably improved banks capacity to lend, particularly to first time buyers. The scheme should boost mortgage lending over the next six months and help counteract the negative impact of an economy which can’t get off the ground,’ he added.
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, pointed out that while August was far from a bumper month for the housing market by historic standards, it’s clear that the added distraction of the Olympics did not derail buyer activity.
‘In fact, as things stand, both prices and activity are holding up pretty well in the face of choppy economic waters. However any substantial recovery will be closely tied to the ability of banks to get adequate and affordable funding to the frustrated buyers that really need it,’ he said.
‘There have been welcome signs that more high LTV products are starting to become available, and the Bank of England’s latest credit conditions survey suggests banks have a healthy appetite to boost their lending to those with smaller deposits in the coming quarter. Yet it’s crucial that this goes hand in hand with a relaxing of lending the stringent lending criteria at present which is playing a key role in limiting the number of buyers able to access the higher LTV deals that are on the market,’ he added.
Paul Hunt, managing director of Phoebus Software, does not believe that there will be much movement in the marekt until the problem of lack of first time buyers is solved.
‘Lenders are offering great rates and attractive mortgage packages but there needs to be greater focus on innovative ways to help new buyers overcome the deposit hurdle. The Funding for Lending scheme could be the trigger we need to stimulate further activity in the vital lower tiers of the market. By making more cheap funding available for mortgages, lenders will eventually start to offer better rates on 90 to 95% loans,’ he added.
This article was republished with permission from Property Wire.