House prices rise at fastest pace for 3 years

The UK’s housing market is going from strength to strength, according to the latest figures, with property prices rising at their fastest pace last month since June 2010.

The figures from the Royal Institution of Chartered Surveyors (RICS) showed that seasonally adjusted house price balance came in at +5, beating a forecast of +4 in a Reuters poll, and coming in at significantly above the balance of +1 recorded in April.

RICS argued that while the housing market had remained muted over the last three years, because of slow wage growth and austerity measures, factors such as the Bank of England’s Funding for Lending Scheme have improved the flow of credit into the market.

New buyer levels also hit pre-crisis levels last month, with this increase partly attributed to the government’s low-deposit housing scheme, Help to Buy.

Peter Bolton King, RICS global residential director, argued that the housing market is beginning to stabilise.

“More people decided to get out there and view property, and more transactions went through than in quite some time,” he said.

“There is still a very long way to go until we see a full-scale recovery but green shoots are beginning to sprout.”

Recent figures from Nationwide also revealed positive figures for house price growth in May, outlining that property prices had lifted by 0.4% last month.

The positive figures from Nationwide are also supported by recent data which showed that property transactions in the first four months of the year were around 5% above the monthly average recorded in 2012.

The first quarter of 2013 also saw an improvement in the number of mortgage approvals for would-be buyers, which surpasses the monthly average recorded in 2012 by around 4%.

“A number of factors are likely to be contributing to the pickup in activity,” said Robert Gardner, Nationwide’s Chief Economist.

“There has been an improvement in the availability and a reduction in the cost of credit, partly as a result of policy measures, such as the Funding for Lending Scheme.  Indeed, mortgage rates have fallen back towards all time lows in recent months.”

Posted by: Nicola Severn Categories: Finance, House Prices, Industry News Tags: , , Comments Off on House prices rise at fastest pace for 3 years

0 Responses to House prices rise at fastest pace for 3 years

  1. avatar M. LAWTON says:

    The international bank recently stated UK house prices are 31% above what they should be relative to comparable leverage!
    Most people have had little or no wage/salary increases in 3years and well below UK inflation rates.Link this with our national debt which on optimistic forcasts will not be significantly improved until at least 2020 where on earth can any sustainable increases in house prices be achieved or be even justifiable?
    Estate agents and their like want to get real and stop all this drivel and stop conning ordinary working people whose offspring haven’t a hope of raising a mortgage on present day grossly inflated house prices!

  2. avatar GEORGE DUDA says:

    Yet more easy credit inflates the bubble still further, drawing more suckers into paying absurdly inflated prices for their homes. Focus on the massive capital amounts you’re paying, not on the artificially suppressed interest payments, you idiots!

  3. avatar KRISTIANOS says:

    The property market is inflated,the easy credit money are good on a short period,U.K. debt is huge and soon the government start to chop from somwhere wher can affect lots of jobs,also the bank of England cannot keep the interest rate forever down!Think over before get a mortgage today!!!

  4. avatar Robert Forsythe says:

    I wish the Government would STOP these lies and that’s what it is LIES,they
    should stay out of the housing market instead of putting more GULLIBLE people into debt for their own political gains.

  5. avatar Dennis McArthur says:

    The comments so far seem unfair. Taking facts into consideration demand continues to outstrip supply, especially in UK urban areas. Couple this with house building continuing to struggle to get anywhere near their target, the UK problem of having a finite amount of building space in urban areas where it’s needed and its easy to see why property values will continue to rise in line with historic trends. M Lawton’s comment on comparable leverage uses the international banks outdated model of 2 earners per home as the said leverage. This does not take into account where more than 2 people buy. It also uses highly inflated mortgage costs that do not reflect the current cost of borrowing. It neither takes into account buy to let borrowing which now forms a much bigger percentage of the house buying market that this model fails to consider. Anyone looking to buy please research the facts rather than other people’s opinions (yes, even mine:)). The housing market in this country is and will continue to be sustainable.

  6. avatar Trevor Mitchell says:

    Why do the Govetnment and other vested interested parties, think increased house prices is a good thing.
    We complain when other things go up, utility bills, shopping etc.
    Instead of artificially keeping house prices up, they should leave it to market forces, supply and demand.
    If the Government is serious about freeing up housing stock, perhaps removing the 500000 illegal immigrants would help !