by Mark Johnston
House prices in June 2012.
TheHalifaxprice index reported that house prices bounced by more than £1,500 in June this year, but they did caution that property values were unlikely to rise this year and sales would not pick up from their low levels.
However, chief economist for Halifax, Martin Ellis, suggested that “continuing low levels of mortgage payments relative to income and recent increases in employment may have helped to support house prices so far this year”.
Despite a small 0.1% fall in property prices, values are actually up 3% on an annual basis, the largest annual increase since December 2010.
David Newnes, director of LSL property services, said “despite the recession and the ongoing financial crisis, house prices have seen a period of steady annual inflation”.
Although, transaction volumes have hit a near record low in June, with only an estimated 57,000 sales taking place. Many experts believe this is not down to a sudden deterioration in prices but more to do with a combination of the Queens Jubilee and record rainfall, both of which disrupted buyer activity.
The Halifax figures are in stark contrast to Nationwide’s June report which showed that house prices fell by 0.6%, as the average property lost £300 of its value.
Gabby Alder, independent buying agent stated that “what is consistent across the country is that the volume of transactions is well below what we were seeing at the height of the market”.
According to the Land registry the housing market is defined by significant regional variations,Londoncontinues to outperform other regions by considerable distance.
London estate agents say that the continuing strength of demand by foreign investors for properties inLondonis a significant contributor to the 8% increase in average prices in the capital.
It does seems however that no matter which index consumers wish to believe the UK housing market remains ‘in the doldrums’ with little chance of a pick up soon.
Some experts believe that it is possible that house prices will gain some support in the future from a shortage of properties on the market, but many expect little change in prices and sales over the remainder of the year.
Richard Quirk, director of low cost online estate agents, stated “there are a couple of economic positives in the form of falling inflation and unemployment but the market is still on a knife edge”.
Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors (RICS), said “although there is some positivity that the amount of sales going through is going to see an increase, it is unlikely that we will see any real movement until purchasing a property is more affordable and accessible for the likes of first time buyers”.
For many potential buyers, especially first time buyers, the biggest hurdle is getting a deposit together to enable them to grab a mortgage and this in turn is what dictates the future direction of the housing market.
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