Widespread joy at the Land Registry’s House Price Index is unfounded, according to chartered surveyors e.surv.
According to the Registry prices were up 0.8 per cent month-on-month in July, as well as increasing 0.3 per cent on July 2011.
However, e.surv director Richard Sexton said that house prices wouldn’t be going “anywhere fast” while bank lending is in such a “sorry state”.
He added: “It says something about the weak state of the market when we’re celebrating a monthly increase of less than 1 per cent. Lending to borrowers with deposits of less than 15 per cent fell to a twelve month low in August. These lower income buyers, typically first-time buyers, are the beating heart of the housing market.
“Without them, the rest of the market is starved of oxygen and prices are dragged down. Only a significant improvement in the economy – and mortgage lending – will be enough to resuscitate activity and help boost prices. Until then, the housing market will be stuck in the mud. The upside for sellers and owners is the lack of supply of property, which has helped support prices even though sales activity is bumping along the bottom.”
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