According to the Department for Communities and Local Government (DCLG), house price inflation is back into double digits. It recorded a rise in prices of 10.1% between April 2009 and April 2010. This is the highest rate of inflation since October 2007, when house prices had already hit their peak and were on a downward trend. Although its statistics are well behind those of other agencies such as building societies like Nationwide and Halifax, the department reported that UK property value rose by 0.4% in April, to make the average house worth £207,516.
Regionally, house price rises were cited in all UK counties except Northern Ireland. In England annual house price growth was 10.9%. In Scotland it was just 2.2% but in Wales it was 11.3%. Conversely, in Northern Ireland prices fell by 8.9% on average over the year.
Mortgage Lending 15% Higher than one Year ago
Although the Council of Mortgage Lenders (CML) say that mortgage lending fell by 9% in April (to 40,000), it is still 15% higher than one year ago. The April dip was attributed to the Easter holidays, a traditionally quiet time for the housing market and the CML says that lending looked “modestly positive” compared to 2009.
What the CML were particularly concerned about though, was the continued lack of first time buyers. The proportion of loans given to first-time buyers was 35% - the lowest figure since September 2007. This shows that mortgage rationing has eased little and first-time buyers are still faced with having to raise a deposit of around 25% to get a reasonable deal.
Suspension of HIPs Boosts Number of Houses for Sale
Since the new coalition Government suspended the Home Information Pack (HIP) in May the number of houses coming up for sale has been predictably boosted. The Royal Institute of Chartered Surveyors (RICS) has found a “sharp increase” in the number of new instructions. Its data also suggests that house prices are on the rise with 22% more of its members reporting a price rise than those reporting a fall in prices in the three months to May. However, the number of sales completed fell by 5% over the same period.
Commenting on the latest survey, RICS spokesperson, Ian Perry said: “Surveyors are generally confident that sales will continue to pick up over the summer months. The increase in supply, as a result of the abolition of HIPs, is helping to support this optimism, despite continuing concerns about mortgage finance. A higher level of instruction should, meanwhile also lead to a flatter trend in house prices in the latter part of the year.”