In defiance of the doom and gloom that currently surrounds the economy, house prices remained static in November but transactions increased by 4.5 percent, according to the House Price Index released by LSL Property Services.
In the year to November house prices fell by only 0.7 per cent. In London, however, prices rose 3.1 per cent since last year, making London the only region in England and Wales to see annual growth.
Commercial Director for LSL Property Services, David Brown, says:
“Static house prices don’t mean property values are standing still. For buyers looking to get onto the market, 0% price growth means that in real terms property is becoming more affordable. With inflation running at 5%, the real cost of property is getting smaller and smaller, which is good news for buyers and mortgage borrowers alike.
The resilience of property prices indicates that mortgage lenders and property buyers have not so far been spooked by the gloomy news emerging from the Eurozone. Although prices have declined by 0.7% since November 2010, the rate of annual price decreases slowed everywhere except the North West and the East Midlands, with London – buoyed by foreign investors seeking a safe haven in the capital’s bricks and mortar – showing an acceleration in price rises to 3.1% last month. Low mortgage rates, along with the stamp duty holiday on properties below £250,000 and the modest boost provided by the government’s FirstBuy scheme, have all contributed to prevent larger falls in 2011.”
Mortgage lending has increased and transaction levels have risen — could we finally be on the road to recovery?
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