What's Happening

Find out what’s happening in the property investment arena both in the UK and internationally

Home  »  What's happening  »  Latest News

UK Property Prices Stuck In A Rut

July 15, 2009Article by Ray Withers

UK property prices seem firmly glued in the doldrums, according to the latest round of home and mortgage surveys.The latest, from researcher Hometrack, says increased demand but lack of supply is holding prices stable.Hometrack calculates the average home in England and Wales costs £155,600 down 8.7% year-on-year.

Similar reports from the Halifax, the UK’s biggest mortgage lender, Nationwide Building society and the government Land Registry all show marginal rises or falls on the previous month’s prices.The gloomy outlook is UK property investment is the breaks may have at last gone on to halt the property price slide but don’t expect any massive increases as lenders firmly keep their vaults shut to remortgages to raise funds for further investment.

“A lack of supply and rising demand have combined to prop up house prices in the last two months,” said Richard Donnell, Hometrack’s research director. “It is the demand side where the greatest risk lies as many would-be buyers continue to remain cautious or are unable to obtain sufficient equity or finance to access the market.”

In London, housing demand is outrunning supply by a factor of 10, Donnell said. The number of new buyers has risen by 36% in the past six months, outpacing a 6.4% in the number of properties for sale, Hometrack said. Overall, the increase in buyer registrations slumped to 4.6% in June, compared with 6 % in May.

Similarly, the number of agreed sales rose 6%, compared with 9.4% the previous month.Bank of England policy maker Kate Barker said the housing market is still “some way away from normal” and that banks have curbed mortgage lending to all but the safest borrowers.

She said would “be cautious about the scale of activity in the next year to 18 months.” The central bank said in a report last week that mortgage lending is now “focused almost entirely” on borrowers with clean credit histories.In a separate statement, the bank said banks are rejecting almost 1 in 5 mortgage applications every month and remortgaging is down almost 60% on the same period last year.

Mortgage approvals climbed less than economists predicted last month as the recession led to the smallest increase in net mortgage lending since records began in 1993. Banks granted 43,414 loans in May, compared with 43,191 in April, the Bank of England said.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
Property Frontiers Awards

The award winning international investment specialists & founder member of the Association of International Property Professionals

Follow us...

  • Befriend Property Frontiers on Facebook
  • Follow Property Frontiers on Twitter
  • Follow Property Frontiers on LinkedIn
  • Watch property investment videos on the Property Frontiers YouTube channel
  • Property investment news from Property Frontiers
  • Read property investment commentary on the Property Frontiers blog