House Prices in the UK have risen again for the 7th consecutive month, aided by better than expected news from the job market, the Nationwide reported today.
The Nationwide said that the average home increased in value by 0.5% in November compared with October and now costs £162,764. The typical home was 2.7% more expensive than a year ago, at a similar level to prices in early 2006. Figures also show that mortgage lenders' deposit demands are easing. "This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows," said Nationwide chief economist Martin Gahbauer. But overall there has been some surprise that prices have continued to rise steadily in the recession, with Mr Gahbauer pointing to unemployment figures as a key factor. "The outlook for the housing market remains dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected," he said. This, coupled with low mortgage rates, meant that fewer people than expected were forced into selling their homes which in turn kept house prices steady.
There has been a further easing of mortgage rationing in the last month, according to the financial information service Moneyfacts. The number of mortgage deals on offer rose by 5% to 1,425 - the largest increas since December last year. The proportion of those requiring a deposit of between 0% and 15% of a property's value rose from 25% of the total at the start of November to 27% at the beginning of December. The proportion of deals needing a 20% downpayment rose from 9% to 11%. But there was a fall in the proportion of mortgages needing a down payment of 25% or more. They fell from 66% of the total to 62%. "Lenders have adjusted to the post-banking crisis world and are starting to relax their lending criteria," said Michelle Slade, of Moneyfacts. "In the last month, we have seen lenders increasing the LTVs [loan-to-value] that their existing deals are available to or launching new deals at higher LTVs. "Significant increases are being seen in the number of deals available for borrowers with a 10% or 15% deposit. Many house price indices are now reporting a rise in house prices, meaning that the risk of higher LTV loans has lessened." The Co-operative Bank said that a growing number of its existing mortgage-holders had been paying off their home loans at a faster rate, owing to low mortgage costs. It said there had been a 56% year-on-year increase in the number of customers making mortgage overpayments. Source: BBC News 03.12.09
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