House price boom starts again
PROPERTY prices yesterday showed their most significant rise since the housing bubble burst almost two years ago.
The latest figures provided a massive boost for the industry and led some experts to announce the end of the housing slump and a return to sustained price rises.
The news came as a welcome jump in UK car production drove the manufacturing sector to its best month since the beginning of 2008.
Britain’s biggest mortgage lender, the Halifax, yesterday said that property values rose 1.1 per cent in July. The three-monthly figure was also up 0.8 per cent, the first rise in the underlying trend since the market peaked in October 2007.
The Royal Institution of Chartered Surveyors said it would be revising its 2009 house price forecast from a fall of between 10 and 15 per cent to a slight increase on prices recorded at the end of last year.
The Institution’s senior economist Brigid O’Leary said: “There has been a clear change in the housing market over the past few months and it is unlikely that we will see the kind of price falls widely predicted at the start of the year. Instead, the return of buyer demand and the limited availability of housing on the market could be enough to support prices so it wouldn’t be surprising to see further increases in the short term.”
Stuart Law, chief executive of property investment company Assetz, said: “Positive price growth for 2009 as a whole is looking very likely, perhaps even greater than five per cent.”
The Halifax results followed a report from Nationwide last week that showed a 1.3 per cent rise in property values last month.
Yesterday’s figures put the price of the average home at £159,623, only £1,200 less than at the end of December 2008.
The Halifax also cut its forecast of a 15 per cent drop in prices this year from 15 per cent to seven.
The encouraging figures came as housebuilder Taylor Wimpey reported a 67 per cent jump in its order book since the turn of the year. David Brown, of LSL Property Services which owns Your Move and Reeds Rains estate agents, said: “Better affordability, improved availability of mortgage finance and a modest pick-up in consumer confidence are all contributing to a stronger housing market.
“On the face of it, it looks as if we’re on the road to recovery. We must keep our nerve and continue the good progress we’ve seen over the past few months.”
The rise in prices is being driven by demand for homes outstripping supply, according to the National Association of Estate Agents.
Its July report revealed agents had 292 house hunters registered in July compared to 192 in July 2008 and 290 in June 2009. With 59 houses for sale at each branch, this means there are five registered house hunters for each property available.
Other signs for an early end to the recession came as manufacturing output grew at its fastest rate since January 2008.
In July, service industries, from hairdressers to financial services, expanded the most since 2008 according to figures from the Chartered Institute of Purchasing and Supply.
Car production lines began to roll again after a disastrous slump in consumer demand that forced many factories to shut down temporarily.
The industry increased output by 13.5 per cent during June in its best performance since January 2006, according to official data.
Manufacturing across all industries produced 0.4 per cent more goods in June than in May – its biggest monthly upturn since January 2008.
