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UK house prices keep climbing |
| Tuesday 30 June 2009 |
House prices rose by 0.9 per cent in June, the Nationwide Building Society said today, fuelling hopes the property market is beginning to stabilise. This is the third time in the last four months house prices have risen and now puts the average UK home at £156,442 - down 9.3% on a year ago.
Nationwide said a comparison of prices taken over a three-month period showed the first rise in prices since December 2007. As a rule the three-month-on-three-month rate of change is a much smoother indicator of the short-term price trend and the fact that this is up will strengthen the case of many who believe the property market is beginning to stabilise.
And as in previous cycles London is once again leading the way, both in terms of renewed confidence and increased activity.
Asking prices in the Capital has fallen the least compared to all other regions of the UK, now down by just 0.5% or £1,870 on average.
The average asking price for a London pad now stands at £397,140 according to Rightmove.co.uk – the UK’s largest online property search engine.
When you consider that many lenders are now asking first time buyers to come up with a 20% deposit it is easy to see why many have no hope of getting on the property ladder and will remain tenants for the foreseeable future.
Even the optimistic bears clinging to the hope that future price may fall dramatically and in doing so give them a leg up onto the ladder is in for a nasty surprise. Figures show that the year-to-date supply of new-to-market properties in Greater London is down 52.3% compared to the same period in 2008, resulting in a shortage of supply. The higher concentration of equity rich and well-to-do homeowners has meant there are fewer forced sellers in London and therefore fewer properties coming onto the market. As a result of the increased demand and restricted supply, time-on-the-market in London is now down from 80 days to just 75 days within the last month.
In comparison, the regions that make up the north of England & Wales have seen 40.1% fewer properties coming to the market, helping maintain their property supply and keeping their prices more depressed, indicating that a north/south divide will probably be apparent in future house price growth.
Mortgage approvals also continue to rise. The Bank of England has reported that the number of mortgages approved by lenders has risen very slightly for the fourth month in a row in May. The number of new loans agreed was 43,414, compared with 43,191 in April but a 10 per cent rise on the previous year. Meanwhile, net mortgage lending rose by £324m in May, the smallest monthly increase since data began in 1993.
The majority of lending is being done by a handful of the bigger lenders, particularly those in which the government holds a stake.
Again, these numbers show that lenders have yet to regain their appetite for lending and that their refusal to offer more competitive mortgages is now the single largest element constraining the property market.
Wishing you health, wealth and happiness, Mike Smuts Property investor and MD of Smuts & Taylor.
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