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Wed 8th September, 2010
News
September shows largest increase in house prices for 2 years |
11th October 2006 |
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Statistics out today from Hometrack show that the housing market has not been adversely affected by the latest rise in interest rates with year on year growth running at its highest level for two years.
Greatest demand was for properties in London and the south-east. The average prices in the capital went up by 0.9% in September, despite the rise in mortgage rates in August.
Nationally, residential property increased by 0.4% in September giving annual rate of increase to 4.3%. Reduced numbers of homes are coming to the market in London, ensuring prices remain strong yet a little fragile. The autumn has historically been a common time to move, with increased numbers of people wishing to move before Christmas.
New homes continue to support the market as demand continues to exceed supply in many areas of the country with buyers reluctant to negotiate aggressively with the Developers/Builders.
October 2006 marks the release of the most recent tranche of funding for the Open Market HomeBuy Scheme (previously known as Key Worker Scheme) which will give thousands of ‘key workers’ the opportunity to take the first step on to the housing ladder. The scheme backed by the Government and mortgage lenders provides a qualifying person with 25% of their purchase price interest free for the first 5 years.
The Government's planned introduction of Home Information Packs (HIPs) in June 2007 and the associated cost of them, is widely expected to cause a slow down in the properties coming to the market. Sellers are likely to be reluctant to ‘test the water’ because they will be faced with a HIP to pay for, should they move or not.
The outcome will be that there will be increasing numbers of homebuyers in the coming months combined, with a reducing supply of properties for them to buy. Therefore, even in light of the recent interest rate rise, and yet another possible rise before the end of the year, supply and demand will dictate that average house prices continue to rise. The remainder of 2006 is likely to be buzzing with activity while early 2007 may well see an increase in the number of properties ‘for sale’ as homeowners try to sell before the need to provide a Home Information Pack to buyers. Summer 2007 is likely to show a noticeable reduction in the number of properties available once again increasing demand and house prices yet further!
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