UK property market on the road to recovery

by Ray Clancy on January 22, 2013

UK property market on the road to recovery

An analysis of data from the leading UK house price indices reveals that the residential property market saw monthly price growth slow in the fourth quarter of 2012. However, strong growth in the opening six months of the year meant prices still ended the year up 3.4%, according to the data from property and financial services company Assetz.

This means that the average price of a home in the UK is now £202,824, an increase of £6,634 since December 2011. The figures are compiled from data provided by the Office of National Statistics (ONS), LSL Acadametrics, the Halifax, the Nationwide and Rightmove. The firm says it gives a comprehensive overview of the UK property market and a more accurate and less volatile picture of house price trends.

The annualised average rate of growth for December was -8.6% while the three, six and 12 month annualised rates of growth are -1.4%, -3.4% and 3.4% respectively. ‘In spite of some downbeat forecasts, 2012 saw the strongest calendar price growth for three years, comfortably achieving our predicted 3%. Following a healthy first six months, there was an inevitable price correction in the second half,’ said Stuart Law, chief executive of Assetz.

‘The UK housing market in 2012 was buoyed by an influx of buy to let investors from home and abroad which has increased competition for the best properties in areas where there is strong employment prospects, transport connections and amenities,’ he explained. ‘For this reason, the market remains two tiered with London and the commuter heartlands of the South East and regional cities such as Manchester, Leeds and Liverpool seeing stronger prices rises than elsewhere in the UK,’ he added.

He also pointed out that with the base rate set to enter a fifth year at its historic low of 0.5% there could be an increase in new landlords diverting capital from low interest savings accounts to high yield property investments. This coupled with the greater availability of mortgage finance as part of the Funding for Lending Scheme (FLS) will support growth.

Quote from PropertyCommunity.com : “Average asking prices for homes in the UK have fallen in the last month but there are overall signs of improvements in the residential property market, it is claimed.”

‘We are confident of price growth of as much as 5% this year which would leave prices just shy of the 2007 peak in nominal terms and their highest since February 2008. The property market is well advanced on its slow road to recovery,’ he added.

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