Transactions and house prices rose in July, which LSL Property Services believes is down to wealthy buyers driving the market.
According to its price index table, transaction rose 11 per cent last month, with prices up 3.2 per cent year-on-year, which is an increase of 0.2 per cent compared to June.
SLS commercial director David Brown said: “The housing market remains a long way away from the heights it hit before the crunch, but both prices and transactions defied the wider economic gloom in July.
“Sales activity bounced back following the disruption of the additional Jubilee bank holiday in June, with the monthly rise in transactions twice the normal seasonal increase. While the shortage of properties on the market remains a stumbling block to a more sustained climb in transactions, it is playing a pivotal role in supporting prices in many parts of the country, boosting competition among those buyers who have been able to secure finance.”
Brown added that much of the buyer activity is being driven by the top end of the market rather than the bottom, with first-time buyers “bearing the brunt” of lenders’ caution, meaning that higher deposits are needed so numbers have not improved.
Banks and building societies, which are making an aggressive play for the well credited section of the market, are targeting those with sizeable deposits or equity.
Brown added: “Unlocking the lower tier of the housing market remains key to seeing volume recovery and much rests on the success of the Funding for Lending Scheme and traction of the NewBuy initiative.”
“There is by no means a consistent picture across the country. While the average national price has climbed, less prosperous areas such as Hartlepool have seen prices fall by 8.3 per cent in the last 12 months, reflecting lenders’ caution in areas with weaker local economies where higher levels of unemployment may threaten borrowers’ finances.
“In contrast, London’s market is going from strength to strength. House prices in 10 London boroughs have hit new highs, with Kensington & Chelsea seeing capital gains of 38 per cent since last June.”
