House Price Spy Blog

It must be something in the air, Spring is here and there is a new phenomenon called the Spring Bounce that has seen property prices rise across the board with average prices up 4.9% and consumer confidence soaring so there is even talk of a recovery sooner rather than later.

The figures from Rightmove will be music to the ears of anyone owning property in the UK, not to mention the Government for which the Spring Bounce will come as a boost with the busy summer period of property deals coming up.

Lets hope the Spring Bounce is not just a temporary thing and we will see a real rise in prices.

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The average asking price for a property in the UK is holding on despite rising prices in the shops, financial meltdown in the UK and the end to any feel good factor which we felt at the start of the year. I think with your savings worth less than ever and all sorts of possible ramifications about the EU bailout and govenment cuts, people are recognising that your home is one of the safest investments you will make, bricks and mortar are once again more important than money in the bank.

Market research conducted in the last few months indicates that around two thirds of home owners in the UK refuse to believe thnat prices will go down and refuse to lower asking prices, middle bracket earners are still staying out of the mire of uncertainty which effects lower earners who struggle to get mortgage finance and suffer from job insecurity, while this lasts the country will hovver above recession.

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The average house price in the UK rose by around £2,000 during October 2011 taking the average sale price to £163,311. This value is slightly higher than the same time last year.

This is of course against predictions made in recent months and with all the EU woes, cuts and Christmas coming up last months numbers are a surprise. The hold on interest rates has been seen as one of the main reasons, the Bank Of England has shown to reason to believe this will be changed any time soon.

With less and less rental properties on the market, rents are rising to record levels and more and more people are re-entering the property market, without a large nunber of new housing being built this will be set to continue.

Prices are down arcoss the UK (down 1.3% in England, Scotland 2.5% and over 6% for Wales) and the best bet is that we wont see a big surge in prices during this year at least. The only area which seems to be bucking the trend is London which has seen demand and prices rise since the days of 2008 when they were heaviest hit.

The Council of Mortgage Lenders have added to the gloom with news that the number of new mortgage approvals are down 5% on the same time last year.

Buyers are still very tentitive, taking longer to complete deals and with more properties on the market, it seems the market may have turned the corner although thats not much solace to sellers who have to choose whether to stay put or take a hit. PricewaterhouseCoopers are predicting a 2.2% rise in prices across the board during 2012 so there is light at the end of the tunnel.

The market seems to be coming round to the real nature of the property crisis. Sales are up by over 10% in England and Wales while the average price is down by 0.1% during June 2011. This is after a very quiet May, which saw 28% of the country seeing a fall in prices.

This is in the same month as a report claims that 80% of homes owners who bought since the crisis started in 2006 are now trapped in their homes, unable to sell without losing significant amounts. Buyers who bought in 2007 and 2008 are worst off with up to 93% of buyers left with a short fall. The total number of properties in question is 3.5 million across the UK.

With the market improving in terms of number of sales, those who can afford to stay where they are will see prices rise and some stability return to the market in the medium term. The buy to rent market is also strong especially in areas including London where properties usually bought by first time buyers are being snapped up where mortgage finance can be found.

Figures for the average house price in the UK rose very slightly in March by a tiny 0.1% according to the Halifax. OK, so nobody will be getting too excited about that but in general prices have been holding steady in 2011 so no cause for disaster just yet.

House prices in the last year have remained static but mortgage lending is noticably down, as the mortgage market is squeezed with many now not able to afford property.

The Bank of England have held the mortgage rate once again at 0.5%. Although with inflation at 4.4% this cannot last forever.

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With 2010 to be remembered more for terrible weather, battling unemployment, a change in government and a fall in house prices what can we expect for 2011?

House prices are expected to fall further during 2011 but start a recovery by this time next year according to the Royal Institution of Chartered Surveyors, the lack of new properties being built and in the stagnation construction market will see balance out the the lack of available finance but consumer confidence is not predicted to return within a year.

US house prices are rising with a 0.7% rise in the last month but less established markets like Dubai are sliding by 3% per month,.

All the gains that brought the market back to life have basically been lost during the second half of 2010 so its hard to predict where they are going on the medium term, the feel good factor has well a truly been snuffed out by cuts, loss of pensions and rising prices and before prices rise mortgage approvals have to rise with more finance provided.

The last vestiges of any idea that the banking crisis was confined to the UK, US and anywhere those two have their money invested is well and truly over. Ireland, after a few days of bluster to the contrary have accepted a 90 billion Euro bailout weeks after Greece did the same thing, Portugal are the latest EU member country to be linked with a bailout.

It seems there are no immunity to the present crisis, it seems EU countries are suffering by being linked in with weak economies with are too dependent on stronger economies, stability is slowly returning to the UK with the US still in crisis, it seems our European partners are starting to suffer just as we are moving upwards.

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The media have been feasting on the projected cuts to be introduced in the next few years, you can hardly have turned on the TV without doom and gloom about what is going to happen to the country, but there is a much more serious influence for every household in the UK. Mortgage lending is down by 10%, and the finance industry has promised to make it much harder to get mortgages in the UK. The lessons of other countries (Germany to name one) and previous downturns have not been learnt it seems.

Rather than protecting the country from another 2007 style downturn by limiting the amount available for UK home owners, the lack of available finance is certain to see another drop in houses in the UK, rather than drawing in first time buyers and those priced out of the housing ladder the past shows that these are just the type of buyers who will be priced out of the market first, all the billions the previous government spent on first time buyers will be wasted and every home owner in the UK will see their investment suffer.

The market is set for a dip, the latest predictions are that there will be falls into 2011, if we artificially limit mortgage lending we will certainly cause a second panic.

The average property price in the UK fell for the third month in a row, with the number of properties entering the market (the word flooding has been used quite a bit) prices are being pushed downward as thousands of sellers test the market across the UK.

Buyers are reported to be described as ‘cautious’ viewing more properties than before and of course considering offering less than the list price.

One of the policy makers for the Bank of England, Andrew Sentance, stated that the BOE consider the current climate (Winter 2010) as being ‘volitile’ rather than a turndown in prices, and will not take pre-mature measures to stifle the slower than expected recovery by changing their low interest rate policy, the mortgage rate was held at 0.5% again last month.