The hometrack national September survey of the housing market reports 0.4% increase in house prices. This follows a broadly stagnating market environment since the beginning of the year. The house price increases are particularly strong in Wales and the North West of England, with current annual rates of house price inflation running well into double figures (10% plus).
County areas leading the rise this month are Shropshire (1.8%), Merseyside (1.4%), Mid Wales (1.4%), North Wales (1.3%) and Cumbria (1.2%). Only four areas recorded house price falls: Surrey (0.4%), Northwest London (0.4%) Berkshire (0.3%), and Suffolk (0.1%).
Generally the main house price rises are occurring in the more affordable regions of the country. The 10 regions with the highest house price rises, have an average house price of £102,400 where as the 10 regions with the lowest house price rises have an average house price of £213,760.
The number of sales agreed again rose in the September survey (up 2%). Sales prices achieved as a percentage of asking prices at 94.6%, has risen for the second month running (from a low of 94.3% in June this year) having been falling from a peak at the beginning of 2002. This suggests the market is tightening, buyers less able to command big discounts.
Time taken to sell is 5.3 weeks and it is talking an average of 11 viewings to achieve a sale.
John Wriglesworth, Hometrack’s housing economist, comments: “The housing market is definitely returning to a buoyant phase, with strong house price rises in most areas of the country, particularly the North West. Clearly houses are still affordable for many homebuyers. With interest rates at a 50 year low, lenders have been showing signs of relaxing their lending criteria, with some allowing buyers to borrow over eight times incomes.
“Provided borrowers take on medium term, fixed rate mortgages such lending multiples still imply that future payment commitments will remain relatively low compared with their incomes. Continuing low unemployment and strongly positive demographic factors, particularly a fast growing population with an inherent desire to become homeowners, all point to a sustained and healthy housing market. The many doom mongers who have been predicting a crash over the past two years are looking rather foolish.”
