July 25, 2009
UK Property Prices Annualised Growth By 17% By End Of Year
We’ve had positive signs, we’ve had green shoots, we’ve had a rise in mortgage approvals and we’ve had an influx of first time buyers – but now we’ve got something new and very, very optimistic – with the annual rate of growth for UK prices predicted to be 17.3 per cent this year…
This is undoubtedly the most optimistic forecast since the credit crunch first darkened our doors.
Whilst some experts are predicting that the market is now bottoming out, one company has gone a step further and predicted a rise in prices that would have been thought impossible a few months back.
By the end of last year, property values had dropped by 22.5 per cent – a devastating turn of events for anyone trying to sell or realise the equity in their homes. Now, halfway into 2009, the market has picked up and some experts are turning their previous dire predictions on their heads.
Economists at property agent Assetz have now said that ‘significant positive growth is likely,’ and have highlighted prices rising by almost GBP2,000 a month.
Figures compiled by Assetz from five UK property indices show the typical cost of a three-bedroom semi last month was GBP185,276 – an increase of GBP1,978 compared with the previous month’s average of GBP183,298.
So far this year, property values have dropped by just 0.7 per cent, helped by a 1.1 per cent rise in May. The annual rate of growth in prices forecast by the company for 2009 is 17.3 per cent.
Stuart Law, Chief Executive of Assetz, said, “All indicators now suggest that we have passed the bottom of the house price curve.
“All the major indices, analysed in our own report, and the recent Royal Institute of Chartered Surveyors survey are indicating an end to falling prices and an increase in activity.
“Extreme supply limitations and some interesting new first-time buyer mortgage products will help support market recovery and it is likely that we will see a flurry of higher loan-to-value rates released, as soon as it is widely recognised that the market has stabilised and the risk to the banking sector of further housing equity losses has diminished.”
Intelligence group Hometrack has reported a 36 per cent rise in buyers registering with agents in England and Wales in the past six months, but only a 6.4 per cent increase in properties on the market. Thus, the supply and demand is unequal and this has helped to prop up prices.
Richard Donnell, Director of research at Hometrack, said, “A lack of supply and rising demand has combined to prop up house prices in the last two months.
“Over the last six months, the volume of buyers has grown by 36 per cent. This compares to a 6.4 per cent increase in the number of homes for sale,” he added.
Estate agents also reported a further five per cent increase in registrations from potential buyers during June.
"All indicators now suggest that we have passed the bottom of the house price curve. While we can't read too much into one set of figures alone, all the major indices and the recent RICS survey are all indicating an end to falling prices and an increase in activity.
"Extreme supply limitations and the recent introduction of some interesting new first time buyer mortgage products will help support market recovery and it is likely we will see a flurry of higher loan to value rates released as soon as it is widely recognised that the market has stabilised and the risk to the banking sector of further housing equity losses has diminished.
" I believe that my original prediction of -5% price falls for the whole of 2009, although at the most positive end of commentators’ projections, is now looking too pesimistic. I expect to see a return to positive year-to-date growth for 2009 by the end of the summer, with an overall growth of around 5% or greater. We expect further sustained recovery in 2010 with concerns over the effect of further job losses overstated in the face of current housing market conditions."
Soure: TheMoveChannel
