Are House Prices on the Way Back to Pre Crisis levels?

by Mark Johnston

Are House Prices on the Way Back to Pre Crisis levels?

Recent analysis shows that the number of houses up for sale is the highest since the start of the financial crisis.

According to Rightmove, the property search website, the number of new houses coming on the market is up 22 per cent to more than 11,000 a week.

It appears that Sellers’ asking prices have risen every month this year and current figures reveal that many new sellers are asking around 4.8 per cent more for their homes than they just a year ago.

“Buyers are far, far more confident than they have been for a number of years,” says Karen Eccles, manager of the Beeston estate agency branch of the Nottingham building society.

Current research suggests that Prices rose by 0.3 per cent month on month in July this year to reach a new peak of £253,658 on average.

House prices are rising at their fastest annual rate for nearly three years, according to Halifax one of the UK’s biggest mortgage lenders.

It seems that soaring house prices have added nearly £12,000 to the value of the average home, according to Britain’s biggest online estate agent.

Martin Ellis, Halifax’s chief economist said “Improved confidence in both the housing market and the economy, combined with a shortage of properties available for sale, appear to be pushing up house prices.”

This newfound sense of optimism seems to have come about on the back of the funding for lending scheme which has prompted lenders to respond with bargain borrowing deals.

However, these latest figures will no doubt will fuel concerns that Government efforts to kick start the housing market could lead to a “property bubble”, with mortgage borrowers trying to stretch their finances too far.

Average prices this year are expected to edge up thus marking a 0.8 per cent increase compared with 2012, according to the Centre for Economics and Business Research (CEBR).

The Ernst & Young Item Club is also anticipating a steady improvement in home prices over the next two years with a modest 0.2 per cent increase this year followed by 2.1 per cent next year and 5 per cent in 2015 helped by economic recovery and the jobs outlook.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (RICS), whose latest survey showed a marked improvement, says: “If you look at the underlying trend, it certainly suggests that things are picking up in certain parts of the country.”

Therefore, this has all lead to some economists believing that the current recovery in the UK property market is gathering pace, with house prices on track to surpass their pre-financial crisis peak for the first time.

In conclusion all these figures and research are good news for home owners and it appears that there is no sign of the momentum slowing while mortgage approvals are already running at their highest level for more than three and a half years.

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