House prices held up well in November as cash rich buyers took advantage of falling mortgage rates, which helped to marginally push up prices, according to a lead figure at LSL Property Services.
On an annual basis prices rose 3.3 per cent, a climb of more than £7,000, while they grew 0.2 per cent compared to October. November saw five per cent more transactions than a year ago.
“Sales numbers failed to dip as we would normally expect in the month and are on a par with the traditionally busier October”, said commercial director of LSL, David Brown.
“In part this is down to the five working Fridays in November, which allowed more completions ahead of weekends than usual.
“There also have been signs of limited improvement in overall lending levels in the last few months, but any progress in the mortgage market has been top heavy.
Lenders remain risk averse and conscious of capital requirements and those that have started to tap the Funding for Lending scheme have been directing additional funding towards buyers with larger deposits and buy-to-let investors looking to capitalise on attractive yields.
As a result, the biggest price rises and the most robust sales figures have been largely confined to the upper echelons of the property market.”
Brown added that 2012 has been a tale of two halves for house prices; the first half of the year saw the strongest price growth, while the market has been more or less treading waterover the course of the last five months.
“Nevertheless, despite steady annual growth, prices in England & Wales are still 2.1 per cent below their 2008 peak. However, the impact of heightened demand at the top of the housing market has accentuated gaps on a regional level. For instance, the ripple-out effect from cash and foreign investment in the centre of London has driven prices in 22 boroughs to new peaks in 2012. In contrast, prices in areas like Darlington are still down 8.5 per cent on a year ago. Until we see a real thrust from the lower tier of the market, this disparity will continue.
“In the absence of further boosts for the first-time buyer market in the Autumn Statement, the pressure is ratcheted up on the success of the Funding for Lending scheme to stimulate activity at the lower end of the market if we are to see the housing market gain momentum next year. At present, there are cheaper deals on offer for first-time buyers, but lenders’ criteria must be loosened in the coming months before we will see a sustained increase in new buyer numbers able to access finance and make their move.”
