July House Prices.

by Mark Johnston

July House Prices.

It seems that Government schemes which are aimed to stimulate mortgage lending are now having an effect in boosting demand.

House prices have recorded their strongest year on year growth in nearly three years, as market activity increases, according to the Halifax.

uk_house_prices_valuationsBritain’s biggest building society, Nationwide also said that “July’s monthly house price increase of 0.8 per cent was robust and it is further evidence of an upturn in the housing market”.

These figures puts year on year growth at 3.9 per cent, which is the highest since August 2010.

A study reported prices were 1.3 per cent higher than a year ago following six months in a row of small increases, marking the strongest annual growth in nearly three years.

House prices are estimated to have risen by around 0.3 per cent in July ,but this a slowdown from the 0.4 per cent rises in the previous two months, according to property data firm Hometrack.

Recent data shows that across England and Wales, 29 per cent of postcode districts registered price increases over the month, falling back from 31 per cent seeing rises in June, which had been the biggest uplift recorded in almost six years.

It also appears that the number of new buyers registering with estate agents rose by 1 per cent in July. However this does show a weaker growth than a 1.6 per cent increase in June and the 2.5 per cent uplift in May.

Sellers are also achieving 94.4 per cent of the asking price on average, taking the percentage achieved back to 2007 levels and homes are taking just over eight weeks to sell, marking the shortest typical sales period in six years.

This all said the housing supply side of the market does however remain constrained as building activity is remarkable subdued.

Current research shows that in the first quarter of this year housing completions in England were down 8 per cent compared to the same period of 2012 and around 40 per cent below the average number of quarterly completions in 2007.

Therefore many housing commentators are increasingly watchful of housing supply data, anxious that if the availability of cheap loans outstrips the growth in properties coming to the market, prices could inflate.

Richard Donnell, director of research at Hometrack, the property data firm, said, “the level to which new buyers enter the market in the autumn will dictate whether 2013 turns out to be the year with the highest increase in house prices since the start of the downturn.”

Jonathan Hopper of property search consultants Garrington adds “The recovery is really picking up pace. Growth of less than 1 per cent is far from the heady days of double digit monthly price rises, but this feels like a healthy recovery of a market that was genuinely in the doldrums”.

On the back of these figures estate agent Savills has recently predicted that UK average house prices will rise 3.5 per cent this year and 18.1 per cent over the next five years.

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