Mortgage News House Prices Up 1percent As Mortgage Market Continues To Improve 18470312
House prices up 1% as mortgage market continues to improve
07 January 2010 / by Andy Davies
House prices increased for the sixth consecutive month in December, according to Halifax’s House Price Index.
December saw a one per cent rise on the previous month, taking the average UK house price to £169,042 – up from £167,451 in November.
The monthly increase also represents the first increase in the annual rate of change, which measures the average for the last three months against the same period in the previous year.
In addition, the continued recovery of house prices represents a 9.4 per cent increase since prices reached a low of around £154,000 in April 2009.
Halifax suggests that the continued rise in house prices is as result of demand for properties outweighing supply, with homeowners remaining reluctant to sell at current prices.
Despite this, Halifax has also revealed that activity in the mortgage market continues to pick up.
For instance, house sales in England and Wales were 11 per cent higher on an annual basis in September according to figures from the Land Registry, while Bank of England figures regarding completed house sales has revealed a 123 per cent increase in November 2009 compared to the same month in 2008. However, approvals remain 53 per cent below their peak in late 2006.
Meanwhile, the index has also shown that mortgage debt has been reduced to its lowest level since 2005.
In December 2009, mortgage repayments accounted for an estimated 23 per cent of average gross income compared to its peak in October 2008 of 27 per cent.
Commenting, Martin Ellis, housing economist said: “The significant cut in interest rates following the worldwide financial upheaval in the autumn of 2008 has markedly reduced the burden of servicing a mortgage for many households. This has helped to stimulate housing demand, albeit from a low base.”
A further boost to the housing market, according to Mr Ellis, was employment numbers increasing in September and October with 59,000 more people in work.
Looking ahead to 2010, Mr Ellis added: “The prospects for the market this year will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our current view is that house prices will be flat during 2010.”
© Fair Investment Company Ltd