Modest Rise In House Prices In May 2012
According to the Nationwide, UK house prices increased by 0.3% in May (after falls in March and April of 1% and 0.3% respectively). Despite the double dip recession and the problems in the Eurozone, prices are expected to remain relatively stable on account of:-
Nevertheless, over the last year, prices have fallen 0.7% overall, and it is anticipated that they will have fallen by around 3% by the end of 2012. Moreover, prices remain relatively high compared to incomes, at over 5 times average earnings (compared to the long term historical trend of 4 times average earnings).
The average price of a house now stands at £166,022.
Back in February 2012, the Bank of Scotland reported that homeowners wanting to move up the housing ladder, but who cannot do so, are causing a 'bottleneck' in the market. This remains a problem, and the Bank are calling on the Government to do more. They attribute the problem to:-
After several years of increases, the Council of Mortgage Lenders (CML) reports that mortgage repossessions have now stabilised, with 9,600 homes being repossessed in the first 3 months of 2012, the same figure as at the equivalent point in 2011. The CML reported back in February 2012, that property repossessions during 2011 were at the lowest since 2007, with the number of properties repossessed in 2011 being 36,200.
The CML further state that the level of mortgage arrears is also now starting to fall.
The construction industry continues to struggle, with the value of projects falling 6% between February and May 2012. Residential construction has fallen 5% over the last year, and non-residential 2%. The Glenigan Index forecasts that the construction sector will remain subdued until at least 2014.
- The lack of houses for sale. There remains a reluctance amongst home owners to place their properties on the market in the current economic climate. Instead, home owners continue to place their properties on the rental market when they need to move
- A lack of new houses being built
- A small rise a mortgage approvals
Nevertheless, over the last year, prices have fallen 0.7% overall, and it is anticipated that they will have fallen by around 3% by the end of 2012. Moreover, prices remain relatively high compared to incomes, at over 5 times average earnings (compared to the long term historical trend of 4 times average earnings).
The average price of a house now stands at £166,022.
Back in February 2012, the Bank of Scotland reported that homeowners wanting to move up the housing ladder, but who cannot do so, are causing a 'bottleneck' in the market. This remains a problem, and the Bank are calling on the Government to do more. They attribute the problem to:-
- Sellers facing problems in raising a large enough deposit to purchase their next home due to a lack of equity in their existing home
- Lack of demand from first time buyers
- House prices remaining too high at 5 times average earnings
After several years of increases, the Council of Mortgage Lenders (CML) reports that mortgage repossessions have now stabilised, with 9,600 homes being repossessed in the first 3 months of 2012, the same figure as at the equivalent point in 2011. The CML reported back in February 2012, that property repossessions during 2011 were at the lowest since 2007, with the number of properties repossessed in 2011 being 36,200.
The CML further state that the level of mortgage arrears is also now starting to fall.
The construction industry continues to struggle, with the value of projects falling 6% between February and May 2012. Residential construction has fallen 5% over the last year, and non-residential 2%. The Glenigan Index forecasts that the construction sector will remain subdued until at least 2014.