Market update

Posted on 30 June 2009 by Drew

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According to the latest survey from the Nationwide, UK house prices rose by 0.9% in June, the third rise in the past four months, and shrank the annual rate of decline to just 9.3%, from 11.3% in May.

The increase in prices during the past month means the average home now costs £156,442, which is £15,973 less than a year ago.

The Nationwide said the stabilisation of prices was a "welcome surprise". Since their recent low point in February, of £147,746, average UK house prices as measured by the Nationwide have now risen by £8,696. They also said the best measure of short-term trends was to compare the average price for the past three months with that for the previous three. On that basis, prices were now 0.9% higher, the first time they have been on an upward trend since December 2007. They added that that if this pattern continued then this year would end with prices down by only "small single digits". "This would represent a stark shift from trends seen at the turn of the year, when most indicators were pointing to a repeat of the large declines seen in 2008," it said.

Although there has been no let up in rationing of loans by mortgage lenders, the building society said potential sellers, and builders, were putting very few properties up for sale, which was bringing some equilibrium to prices. But it warned against interpreting its latest data as the beginning of a sustained recovery in prices, as the abnormally low supply levels would not last for ever.

The National Association of Estate Agents (NAEA) says the increase in agent sale boards shows optimism in the housing market. The group revealed that a third of estate agents said they've seen around a 10% increase in properties coming onto the market, compared to six months ago. Furthermore, one in six agents said they'd experienced up to a 20% increase, adding further optimism in a recovery in the housing market. Gary Smith, president of the NAEA, said: "Since the beginning of the year NAEA members have seen a significant increase in demand. There are clearly plenty of buyers out there. Last month the NAEA registered an average of four buyers for every available property." The UK housing market is over the worst, added.
 
Half of all home sales are going through without the Home Information Pack demanded by the Government, it has been claimed. The controversial requirement for sellers to buy and complete a HIP costing £300 or more is simply being dodged or ignored, according to research. This mass disobedience of the law has been highlighted by the Conservatives, who have pledged to scrap the 'pointless and expensive' system. Sellers have been required since April to have a full HIP in place before marketing their home. However, a survey by Spicerhaart, the country's biggest independent estate agency firm, in the following five weeks found a HIP was available and completed in only 48 per cent of cases.
 
According to the latest figures from the Bank of England, the value of purchase loans taken out by homeowners swelled from £5.1bn in April to £5.4bn in May.

In real terms this equated to 223 more purchase loans taken out in May, rising from 43,191 in April to 43,414 in May.  

Remortgages taken out in dipped in terms of the number, falling from 31,701 in April to 30,984, but the value of the loans was consistent over both months at £3.9bn.  

Overall, some £10.2bn worth of loans secured on homes were taken out over May, up from £10bn in April.

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