House Prices in February 2013.

by Mark Johnston

House Prices in February 2013.

At the moment it seems that British households have little room to make ‘big ticket’ purchases such as property.

However, low mortgage rates and the bank of England’s funding for lending scheme appears to be slowly supporting the UK housing market recovery.

According to the Royal Institution of Chartered Surveyors (RICS), the leading professional body for qualified surveyors, house sales have reached a two and a half year high in February, boosting recovery hopes.

Therefore many surveyors expect prices to edge upwards following this pick up in sales.

This increase in sales has been attributed to improving mortgage availability, stimulated by the governments £80 billion funding for lending scheme which gives lenders access to cheap finance.

Industry experts now have significantly higher expectations for UK house prices in the coming months.

New research has shown however that property prices are rising in towns but they seem to be falling in the country.

Figures from PrimeLocation, a property website, revealed that the average asking price of properties for sale in urban areas in England has risen by 1.9 per cent since the same time last year.

Although asking prices for properties in the country are down by 5.1 per cent in the same period.

The Department for the Environment, Food and Rural affairs stated that the average rural home is now 14 per cent cheaper to buy than the average urban property.

Although the past 12 months have seen ups and downs in prices, in recent months figures have tended to be in positive territory.

According to the Halifax, house prices have continued their slow ascent in February showing a modest monthly increase of 0.5 per cent and this also contributed to both a quarterly and annual price rise of 1.9 per cent.

Martin Ellis, housing economist for the Halifax, says “the increase in both prices and activity in recent months is consistent with evidence of some improvement in market conditions”.

Data shows that new sellers average asking prices now stand at approximately £235,71, which is the highest in February since 2008.

Nationwide’s house price index revealed that house prices in the UK rose by 0.2 per cent in February, but they did remain flat on an annual basis.

Robert Gardner, chief economist at Nationwide, commented that “for the second month in a row, UK house prices remained flat in annual terms, maintaining the trend of broad stability that has been evident over the past two years”.

Howard Archer, chief UK economist at IHS Global Insight, added “the small rise in house prices in February reported by the Nationwide ties in with our view that house prices will be essentially flat over 2013”.

Peter Bolton King, global residential director at the Royal Institution of Chartered Surveyors (RICS), stated that “it is encouraging to see that the housing market now appears to be picking up across most parts of the UK despite on going concerns about the health of the economy”.

However, experts do feel that even with activity running at its best level since the middle of 2010, it is still well down on its pre-crisis norm.

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