14 July 2010

UK residential property values are still increase, according to the department of Communities and Local Government. The report shows that the market, although slowing slightly, is in a better condition than other sources have stated.

The data, which includes data based on mortgage completions during the month of May, highlights that prices rose 0.7% in May and now stand at 11% higher than in May 2010. The figures also show that prices rose 1.7% in the second quarter of 2010, compared with a 2.9% increase in the previous quarter.

The results also show that annual average house prices rose 11.7% in England, 3.7% in Scotland and 10.9% in Wales. First time buyers in May 2010 had to pay 11.6% more than the same time the year before. Similarly, house prices paid by former owner occupiers were 10.8% higher and the value for new properties was 6.5% more than a year ago.

Despite this optimism Simon Rubinsohn, Royal Institution of Chartered Surveyors (RICs) chief economist, believes that these figures highlight uncertainty about the current state of the residential property market. Rubinsohn pointed to the fact that the 0.7% rise in May is stronger than the increase shown by the Nationwide Building Society for the same month and contrasts with declines reported by the Halifax. Rubinsohn stated: “This divergence in part reflects the fact that the indices are gathering price data at different points in the house purchase process. However, relatively low transaction volumes may be adding to the volatility of the individual series.”

“New instructions are now outstripping buyer interest and this has been reflected in the RICs price expectations series turning negative.”

Source: Property Wire


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