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House Prices Are On The Increase

June 11, 2013

Posted by Simon Misiewicz on 5th June 20113

In May I wrote an article that suggested that the number of mortgage applications had increased. Indeed they continue to increase and as a result have now increased house prices.

A case of the old classic “supply and demand”.

UK house prices have continued their upward trajectory during the course of this month, rising by 0.4% to £167,912 (4).

The Council of Mortgage Lenders (CML) has suggested that mortgage lending has increased by 21% since April 2012 (1). The number of mortgage applications in April 2013 saw an increase of 60% compared to the same time last year (2).

These figures are echoed by Nationwide who saw their own lending increase by 17% (3).

If more people are buying properties then what do you think will happen to house prices?

Mortgage rates have fallen since August 2012. Currently a two-year fixed mortgage rate stands at 3.82%, compared with 4.66% in May 2012. Chief economist at the CML, Bob Pannell, said: “The comparison with April last year, 21% higher, is flattered by the temporary dearth of house buying activity immediately following the closure of the stamp duty concession.

“The true underlying position is that April is likely to have been one of the strongest months for lending activity since late 2008, but not as strong as the year-earlier comparison suggests. Gross lending on a seasonally adjusted basis has been running comfortably above £12 billion for several months, but this is still barely half the average level of lending seen in 2003-4.” (1)

Brian Murphy, managing director of the Mortgage Advice Bureau, said: “What comes next in the development of Help To Buy, will determine just how many people can join the rush to secure a good deal on property, whether or not they are first-time buyers or second-steppers.

We are still waiting to see how the mortgage guarantee will work in practice, but in the meantime the competition between lenders means there is plenty of reason to shop around and seek advice to secure a favourable offer.” (2)

Residential properties are taking 86 days to sell on average, 5.6% faster than in quarter four of last year.

“Move with Us” stated rising asking prices and numbers of listed properties suggests that sellers are growing more optimistic. “If seller optimism is not met by a rise in buyer demand, any increase in asking price is generally met with longer sale times,” the report said. (5)

London house prices went past the £500K mark this month being 8.6% higher than a year ago and twice as much as the national average house price. However, Yorkshire and East Midlands saw falls in house prices dropping 1.1% and 0.6% respectively in the month of May 2013. (6)

If you contact Simon this month he will provide you with a free “Property Investment Evaluation” session via Skype to look at your potential property investments to make sure that you are getting the best returns on your money. For more information please contact us on 0115 946 1991 or Click Here To Email

References:
(1) Mortgage Lending Up By 21% Year-On-Year
(2) Mortgage Applications Increase By 54%
(3) Nationwide Mortgage Lending Share At Record High
(4) Rise In House Prices During May
(5) Average Asking Prices Increase
(6) House Asking Prices Reach New High



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Telephone: 0115 939 4606
Email: simon@optimiseaccountants.co.uk