House prices continued to creep up over June, despite concerns about rising interest rates adding to the costs of mortgages. Buyers seem unpeturbed, and Nationwide Building Society said prices rose by 0.30% in June. Hometrack, the property research company that receives data from more than 3,500 estate agents, reported a more impressive 0.60% rise.
While affordability remains a major issue for first-time buyers, those who are trading up are more fortunate. They have large amounts of equity providing them with big deposits for their next homes, and these buyers are helping push prices upwards.
A bigger factor, however, is the shortage of properties on the market relative to demand. This is leading to stiff competition among buyers which is squeezing prices up. Indeed, according to Hometrack, the time taken to sell properties has plummeted from 7.4 weeks a year ago to 6.5 weeks today, and the average number of viewings before a sale is agreed has also fallen from 13.2 to 10.9 over the same period. All consistent with an increasingly competitive market.
Hometrack said that a continued shortage of properties on the market had squeezed up prices in 42% of areas in the UK, with 56% areas unchanged and just 2% of areas witnessing price falls. However, London was by far the biggest riser, up 1.1% in June alone, and by 5.8% since the beginning of the year, far outstripping any other region.
Property sales are also well up on this time last year, according to Your Move, the estate agent.Regionally, house sales rose fastest in southern England, with East Anglia up 29.6%, the south-west up 23.4%, the south-east up 21.9% and outer London up 21.4%.
Performance in the north has been more subdued – with sales falling 14.8% in Scotland and 2.9% in the north of England.
But a recent surge in viewings in both regions suggest transactions will increase soon.
The prospects for continued price growth depend to a large extent on what happens to interest rates. The arguments for a move up or down are quite finely balanced, and the Bank of England’s Monetary Policy Committee is adopting a “wait and see” approach, hoping to glean more data on risks to inflation before making any decision.
The base rate is likely to remain at 4.5% for at least the next few months, but fixed-rate mortgages are already rising. Two-year fixes now start at 4.59% and five year deals from 4.99%. Discounted variable rates are cheaper, starting from 4.19% for two years, and may well be worth considering since they are so much cheaper than equivalent fixed-rate deals. Somebody could take the 4.19% discounted rate, see the base rate increase at least once, and still have lower mortgage repayments than somebody taking a two-year fixed rate
more mortgage news
No comments:
Post a Comment