5
Aug
House prices rising, says Halifax
House prices are now rising, according to the latest survey from
the Halifax mortgage lender.
The cost of the average house went up by 1.1% in July to
£159,623.
Prices in the three months to July were 0.8% higher than in the
previous three months, the first increase in the underlying trend
since October 2007.
Housebuilder Taylor Wimpey also said it was seeing signs of a
turnaround, with its sales rising in the first six months of the
year.
The prices of the properties it had sold had now stopped falling
and its order book had risen by 67% since the end of last year.
"There are signs that the situation is beginning to improve,"
the company said.
Despite this the firm recorded a half year loss of £682m,
mainly due to again having to reduce the value of its stock of
building plots.
Higher demand
The annual rate of house price decline has now shrunk to just
12%, from 15% in June, moving in a similar direction to that of the
Nationwide's rival survey.
"Demand for homes has risen, albeit from a very low base, since
the start of the year, driven by improvements in affordability and
low interest rates," said Martin Ellis, the Halifax's housing
economist.
"Higher demand has combined with the low levels of property
available for sale to boost sales activity from exceptionally low
levels and support prices over the past few months," he added.
Last week the Nationwide building society also said prices had
risen in July, with the underlying trend as measured by its own
survey moving upwards at the fastest rate since February 2007.
Despite this apparent turnaround in the UK's dramatic house
price slump, both lenders are being very cautious and both are
refusing to predict that prices will now keep on going up.
Many properties that might have been put up for sale are being
let to tenants instead.
And some homeowners in financial difficulty are only avoiding
repossession because the record low level of interest rates has
dramatically reduced the burden of making their monthly mortgage
repayments.
Experts say that if the apparent revival of prices encourages
more people to try to sell their homes, or interest rates rise,
then the balance of supply and demand could tilt, leading to a
renewed downturn in prices.
"There is a stark shortage of property on the market and this,
above all, is driving the rebound we are seeing," said David Smith
of property consultancy Carter Jonas.
source: www.bbc.co.uk/news Wednesday
5th August 2009