Your Move’s monthly house price predictor is forecasting a 1.65 per cent increase in the exchange price of the average UK property in May. The predictor is based on Your Move’s agreed sales data (Jan / Feb) adjusted to reflect the Land Registry’s sales distribution in those months. The predictor anticipates the average house price on exchange will rise 1.65 per cent to £179,750 over May 2007, as the market picks up after a slight drop in February.
Agreed Prices
Agreed prices (the value agreed when a buyer’s offer is accepted) continue to rise, suggesting that demand will remain strong in the coming months. Actual agreed prices - typically reached eleven weeks prior to exchange – rose 1.64 per cent on average in April, to £183,761 from £180,803 in March. This is symptomatic of the long term upward swing in agreed prices, which have risen 7.00 per cent year-on-year.Agreed prices were also significantly closer to sellers’ asking prices this month. As a percentage of asking prices, agreed prices were up to 91.83 per cent compared with 91.35 per cent for March.
Pipeline
The performance of pipeline numbers (outstanding agreed sales prices not yet exchanged) endorses the direction of the Your Move predictor. It further confirms the strength of exchange prices.
David Newnes, managing director of Your Move, said: “Actual house prices (based on exchanges) grew in April, indicating a market throwing off concerns over interest rate hikes. Our model forecasts that exchange prices will continue to rise by around 1.65 per cent in May, with growth in new property coming onto the market driven by the rush to beat the introduction of HIPs in June – Your Move is already experiencing an uplift.
“Our predictor suggests effects of increasing interest rates have been negligible. This is explained by the very sound fundamentals underpinning the market. Employment is rising. Lack of supply is underpinning the market. The economy is still growing. Inflation is falling. The reality is property remains a very good long term investment. Even if we do have to put up with another interest rate rise this year, there are some very good mortgage schemes on the market based on buyers’ affordability, making it possible for new home buyers to afford buying a home. Compared to the days of 15 per cent interest rates in 1991, we are living in an affordability nirvana.”
