 
Quick Move Blog
Thursday, 28 June 2007
UK house price inflation "bounced back" in June with prices rising by 1.1%, according to the latest survey from the Nationwide building society.
The stronger-than-expected increase lifted the annual rate of growth to 11.1% from 10.3% in May.
Nationwide said prices were rising more than twice as fast as last year, with the average house price now £184,070.
However, it said that it thought the rate of growth would slow in the second half of the year.
Estate agents are continuing to show a fall in the number of new buyer enquiries and house builders are also registering falls in the numbers of site visitor
The strength of the UK housing market was underlined by the fact that prices in the past three months rose 2.2% compared with the previous three month period, up from May's comparable figure of 1.9%.
Nationwide's survey findings run contrary to recent trends which have seen house price inflation beginning to plateau.
But Fionnuala Earley, Nationwide chief economist, said that despite June's uptick in inflation, the housing market was showing signs of "softening", with the recent rises in intereet rates bing the key reason.
Wednesday, 20 June 2007
The Council of Mortgage Lenders has reported a slowdown in the rise in mortgage lending, lending weight to the evidence of a cooling in the housing market.
Total lending in May was £31bn, 12% higher than in April, down from previous months and just 5% higher than 12 months ago.
Thursday, 14 June 2007
The Royal Institution of Chartered Surveyors (RICS) has reported a record number of properties being put up for sale in May, with people trying to avoid the introduction of the new delayed Home Information Packs (HIPs).
RICS expect the increase in supply to be short lived.
RICS also reported that higher interest rates and the ending of some fixed rate mortgage deals was leading to a cooling in the UK housing market.
Thursday, 7 June 2007
The Bank of England held rates this month at 5.5%.
However, with the economy expanding at the fastest pace in three years in the first quarter and the lowest level of unemployment for 18 months, a majority of economists surveyed by Bloomberg expect rates to increase by August.
This is despite signs that the housing market is cooling. The latest Halifax housing survey shows house prices rose just 0.3% in May, pulling the annual inflation rate down from 10.9% to 10.6%.
According to the Halifax, this is clear evidence that the property market was reacting to the four increases in interest rates since last summer. The Halifax now puts the average UK house price at £196,893.
Monday, 4 June 2007
A rise in interest rates in July is widely predicted by City economists.
Howard Archer, the chief UK economist at Global Insight, said rates are likely to be unchanged in June because of evidence that homeowners are already struggling with affordability.
"The housing market is coming off the boil as demand is increasingly pressurised by the rising affordability pressures stemming from high interest rates," Mr Archer said.
Archer added that there was a 40 per cent possibility of interest rates reaching as high as six per cent.
Home repossessions are already rising as householders deal with rising interest rates as well as council tax and energy bills. As we've mentioned before, 17,000 houses were repossessed last year and experts have predicted this figure will double even if interest rates stay static.
The Financial Services Authority has compiled a database of properties sold at auction, and found that the percentage sold because of repossession rose from eight per cent in February 2006 to 25 per cent in December 2006.
Neil Blake, of Business Strategies, said there were "severe increases in financial stress" from interest rate rises. He predicts that if rates rise sharply from 5.25 per cent to 6.25 per cent, there will be 55,000 repossessions a year in two years' time.
Today's Daily Telegraph reports that up to a million homeowners who are coming to the end of their current fixed rate mortgages, are facing fees of £1,000 or more to remortgage.
The Investment Bank, Credit Suisse, estimates that one in five British homeowners switched mortgages to fixed rate deals in August 2005 after a cut in interest rates. Most took out two-year fixed rate deals, which are now coming to an end.
These will have to be replaced by more expensive mortgage deals, many of which will also carry an arrangement fee of £1,000 or more.
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