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UK House prices take an up swing for Spring

Houses on Tiverton Road, Bournbrook

There has been a pronounced upswing in UK property prices according to Rightmove’s April House Price Index Report. This is the third month in a row that prices have increased representing more than just a seasonal bounce. Continueing with the good news, sellers are returning to the market with 22,000 new homes for sale this month, an increase of 13% on March. However: Mortgage approvals are at a third of levels seen between 2002 to 2007, which puts the recovery process back into context.

Miles Shipside, commercial director of Rightmove comments: “My view is that many sellers are still starting too high, but the fact that they are coming to market in greater numbers and feel they can ask more shows a strengthening in resolve and confidence, which is an encouraging sign. It looks like we are now bumping along the bottom of the trough, but for there to be any real sense of optimism that we’re on a sustainable road to recovery, the availability of mortgage finance needs to improve significantly, given that mortgage activity is currently running at around a third of its average levels between 2002 and 2007. Thankfully mortgage lenders are finally starting to release more funds to finance new house purchases.”

Shipside observes: “With only 38,000 mortgage approvals recorded in February, it will be a
real challenge for mortgage lenders, including the Government-owned institutions to satisfy
the mortgage needs of both these 111,000 new sellers and those who are already active in
the market.”

A fall in time-on-market is further evidence of the spring bounce in sales activity reported by many agents. This has fallen from 81 to 77 days.

The highlights of the report are:

  1. Asking prices rose by £3,996 or 1.8% which is the largest monthly increase for 14 months.
  2. This is the third consecutive monthly increase making this more than just a seasonal bounce with 80,000 reducing the asking price by 2% or more each month.
  3. There are 22,000 new sellers entering the market each week up 13% on March.
  4. Mortgage approvals are running at about a third of levels seen between 2002 and 2007.

All regions of the UK saw a price increase in April with the exception of Greater London which recorded a drop of 3.2% on the month against an annual decrease of 4.1%.

Creative Commons License photo credit: thornj

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