UK - House prices in December rose by 0.8%

 House prices in December rose by 0.8%
The average price of all residential property transactions completed in England & Wales in December 2009 was 0.8% higher than in November. This is the eighth month in succession in which FTHPI has increased, although the rate is slowing.

 Prices end the year 4.2% higher
On an annual basis, in December, the average price of all residential property transactions in England & Wales was 4.2% higher than a year ago - a significant market recovery. It was the second consecutive month in which the annual rate of change in house prices was positive.

 November housing transactions lower than previous month
In November 2009, the number of houses sold in England and Wales will total approximately 58,000. This is a reduction of almost 40% on the 10 year average for the month of c.95,000.

Dr Peter Williams, Chairman of Acadametrics, said
“The average price of a home has continued to rise and, at £214,283, is back to where it was in December 2006, three years ago. The current monthly house price increase of 0.8% is the eighth in succession, suggesting a recovery that is now well entrenched. However, as we go on to show, the rate of increase has been slowing since September and there are strong regional variations in the recovery story. This does underline the considerable uncertainty which exists as to the likely trend of house prices in 2010.”

“The average price of a home in England & Wales is now £214,283. At this level, it is still down £17,540 from its peak in February 2008 of £231,823, but clearly, on average, prices have stabilised and the index is showing a 4.2% increase over the last twelve months. All major indices are trending in the same direction, whilst recognising that FTHPI covers all transactions, both mortgaged and cash sales, but only for England and Wales. The fact that there remain strong regional variations in this reported trend does mean that household experience will vary considerably, although prices in all regions are also currently moving in the same direction - upwards.

“It is clear that, at 0.8% compared to 0.9% in the previous month (and to 1% in October and 1.2% in September), price increases have been moderating over the last three months, but it is too early to say with any confidence as to whether this trend will continue. The latest Bank of England statistics indicate that mortgage lending to households increased by £1.5 billion in November, and its most recent Credit Conditions Survey reported „a further slight increase in the availability of secured credit was expected‟ over the first three months of 2010. This continues to suggest a slow recovery in the mortgage market which will, in turn, constrain transactions and prices.”

HOUSING TRANSACTIONS
“Overall, the number of housing transactions in England and Wales has increased by 32% over the last three months (September–November 2009) compared with the same three months in 2008. However, this single statistic hides two distinct underlying trends. The first trend is of a North/Midlands/South divide in the increase in the number of homes sold. In the Northern regions and Wales, the average increase in housing transactions has been 19% or less; in the Midlands the increase has been between 23% and 27% whilst, in the Southern regions including London, there has been an annual increase of 38% to 49% in the number of properties sold.

“The second trend is that of different activity levels by property type. Over the three months September–November 2009, compared with the same three months in 2008, increases in the numbers of properties sold have been as follows: detached 53%, semi-detached 40%, terraces 26% and flats 10%. Flats continue to represent the current “weak” sector in the market. These are traditionally associated with the „First Time Buyer‟ and „Buy to Let‟ markets - both impacted by the continuing limited supply of mortgages and tighter loan terms. Although there is some suggestion that the flow of mortgage finance is beginning to ease, it is likely that any recovery will be slow.”