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Mixed month for purchasers as house prices fall but transactions rise
Mortgage transactions increased by 20% in June compared to May 2011, as house prices fell back to their lowest within the UK since January 2010.
The rise in transactions is much faster than the usual seasonal up stick seen at the start of summer, despite overall activity within the overall housing market remaining relatively quiet. For property purchasers, the decrease in house prices will boost investors looking to purchase property and may make it easier for more individuals to obtain the most suitable and affordable mortgage for their specific needs.
The average house price within the UK now stands at £219,365, a level higher than the average house price seen at the worst of the recession in April 2009 but lower than levels seen in the past eighteen months. A flurry of mortgage activity saw a significant rise in large loans and private mortgage finance over the past month, with a 58% increase in the number of £1 million plus homes being purchased by individuals.
The commercial director of LSL property services – David Brown – has today claimed: “The good news is that there has been an increasing number of higher LTV deals trickling onto the market in recent weeks. But with doubts lingering over unemployment this year, and the anaemic growth in the economy, credit conditions remain tough and lenders are unlikely to abandon their cautious stance and completely open the taps for buyers without very large deposits.
“With the provision of social housing not up to scratch to meet the accommodation needs of Britain’s increasing population, the onus will remain on the private rental sector to soak up demand from the growing number of frustrated buyers.”
Unfortunately, a fall in house prices could see a fall in consumer confidence within the property market and the wider UK economy. However, it is hoped that the significant rise in transactions seen over the last month will continue to see the mortgage market improve and pick up after the dark times of early 2009. A number of cost effective and competitive deals can still be found for the right client.
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