Prices over the period September to November were 3.7% higher than in the previous three months. This is the biggest increase on a three monthly basis since November 2006. Prices have increased by 8.5% since reaching a trough in April 2009; an increase in the average price of £13,174. This follows a decline of 23% between August 2007 and April 2009.
The Halifax House Price index for November 2009 reports that house prices rose by 1.4% in November. Prices have now increased for the fifth consecutive month, with the average house price up by 4.2% (£6,803) in the first eleven months of 2009. The average UK house price is now £167,664.
House prices in November were 1.6% lower on an annual basis. The annual rate of change (measured by the average for the latest three months against the same period a year earlier) has improved significantly from a low of -17.7% in April.
Completed house sales in England and Wales were 11% higher on an annual basis in August, according to the latest Land Registry figures. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – increased, on a seasonally adjusted basis, for the eleventh successive month in October. Approvals were 79% higher than in October 2008 and were at their highest level since March 2008. Despite this improvement, approvals remain 56% below their late 2006 peak.
The increase in sales in recent months has outpaced only a modest rise in the stock of properties available for sale. As a result, the ratio of house sales to the stock of unsold properties on surveyors' books increased for the tenth consecutive month in October. (Source: RICS monthly survey, October 2009.) The increase in this ratio suggests that market conditions will provide further support for house prices in the short-term.
Commenting, Martin Ellis, housing economist, said: “House prices increased by 1.4% in November. This was the fifth successive monthly rise with prices more than 4% higher over the first eleven months of the year. The recovery in house prices since the spring has been driven by increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers who can raise the necessary deposit. Somewhat higher demand has combined with a low level of properties available for sale to push up prices. Further ahead, the prospects for the market will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our view is that house prices will be flat during 2010.”
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