Property Prices Fall As Mortgage Lending Rises

UK Property Prices Still Falling But Its Not All Bad…

UK Property Values Continue To Fall say RICS

UK property prices fell faster than expected in November2012, attracting many new buyers according to the Royal Institute of Chartered Surveyors (RICS).

In its latest analysis of the UK residential property market, RICS found that:

• 9% more of RICS surveyors reported property price falls rather than rises, as enquiries from potential property buyers has picked up steadily across the country since the end of the summer.

Meanwhile the number of mortgages taken out by first time buyers increased by 14% in October, following a quiet September, according to the latest figures from the Council of Mortgage Lenders (CML).

The CML said that if the gradual improvement in house purchase lending continued as expected “next year should feel a more stable and positive year in the housing and mortgage markets”.

In its housing market forecast for 2013, RICS predicted that there is likely to be a 3% year-on-year increase in UK residential property sales, with 960,000 property transactions forecast to take place next year, which would be the highest number since 2007.

Although this is an improvement, it would be modest by historic standards given that total UK property sales in 2006 amounted to 1.62 Million.

RICS said that factors such as the government’s Funding for Lending scheme will result in some improvements showing through in the UK housing market next year, as would-be buyers find it easier to borrow.

In October 2012, a total of 20,000 mortgages were advanced to those taking their first step on the property ladder, a sharp rise on the previous month and up by a fifth on October 2011.

The value of those loans reached £2.5 Billion (GBP), up from £2.2 Billion (GBP) in September and £2.1 Billion (GBP) in October 2011. 

For the second month running loans to first time buyers accounted for 40% of UK residential property purchase lending, figures are yet to be released for Buy To Let Mortgages.

However, CML data showed that first time buyers are still putting down on average a 20% deposit on the property when purchasing.

The 2011 census revealed that the mortgage drought and high property prices have changed the face of the UK housing market, with the number of people in private rented accommodation rising from 9% to 15% since 2001.

Good news for all UK landlords with Buy To Let properties.