The pace of house price inflation on the government’s official measure has rebounded upwards but remains close to October’s 9 half year low.
House price inflation has been hovering in the range of 2-4 per cent since July, as the market settles after a marked slowdown since mid 2004, says the Royal Institution of Chartered Surveyors (RICS).
The August interest rate cut along with continued strength in employment has supported housing market conditions, with mortgage activity above its long-run average.
First-time buyer (FTB) property prices in November were still rising at 5.2 per cent per annum, which is ahead of wage rises, says RICS.
Prices of FTB homes have consistently grown faster than the average for all homes since January 2004. Prices for FTB homes are now 18 per cent higher than they were in January of 2004 compared with 15 per cent growth in prices for all homes over the same period. This means that affordability remains a major issue for FTBs, despite the housing market slowdown of the past year.
The figures from ODPM show that annual house price inflation remains above average in Northern Ireland, Wales, northern England and Scotland, while little change has occurred southern England and the Midlands.
Statistics based upon information from chartered surveyors estate agents indicate that the market is showing signs of improvement across the country in the past month as buyers have come back into the market. RICS expects the current upturn in housing market activity to be sustained into 2006 as the economy pulls out of the slowdown of the past year.
