The housing market remains strong as house prices continued to rise in November, according to the latest research from the Royal Institute of Chartered Surveyors (RICS). It said that 35% more of its members reported a rise during the month than those that reported a fall – the highest level since November 2006. The driving force behind the buoyant market would appear to be demand outstripping supply, despite evidence of a recent increase in the number of homes coming to market. In recent months RICS members have shown a general increase in new instructions.
The recent increase in buyer enquiries is cited by RICS as the main reason for recent property rises. In November the two biggest mortgage lenders showed rises in the value of property; Halifax said that house prices rose by 1.4% and Nationwide showed a more modest rise of 0.5%. However, the pace of recovery seems to be slowing as RICS members become less positive about the outlook for the market. Twenty-eight percent of chartered surveyors believe that prices will continue to rise, but that’s down from 31% in the previous month. Many experts are urging caution for buyers, predicting a price correction in the second half of next year.
RICS spokesman, Ian Perry said: “For the fourth month in a row now, the survey points towards prices rising, even though the general state of the economy would suggest that the housing market should not be faring as well as it is. Despite the modest increases in the number of properties coming onto the market, it is clear that this is not significant enough to keep pace with the levels of demand.”
Home Loan Arrears Fall Slightly in the Third Quarter
Positive news about house prices will be a crumb of comfort for those homeowners who have fallen behind on their mortgage payments. The number fell slightly in the third quarter of the year; down to just under 400,000, which was 2% lower on the previous quarter but 16% higher than one year earlier. The statistics, supplied by the Financial Services Authority (FSA) show that the number of repossessions went up in the third quarter of the year, by 2.8% to 14,000. Although the figure is high, it is 5% lower than the repossession peak at the beginning of the year.
FSA data differs from that of the Council of Mortgage Lenders (CML) somewhat, in that it takes into account unregulated mortgages, such as second charge loans. The FSA agree with the CML and the Bank of England about the general trend in mortgage lending growing in the third quarter but it shows the amount of unregulated mortgage lending, including buy-to-let, going down.
The housing minister, John Healey, announced that the Government would be ploughing a further £4m into funding for debt counselling to help cash-strapped homeowners in danger of repossession. Mr Healey claims that 330,000 households have benefitted from Government support over the past year in the shape of community debt counselling services.