(PRWeb UK) September 15, 2009
The first FindaProperty.com House Prices and Affordability Index, shows national UK asking prices moving into positive annual growth for the first time this year, with prices currently £512 higher than a year ago. This is a result of six consecutive months of stable or positive monthly house price growth, as buyers take advantage of good value in the market with renewed confidence.
- National asking prices are higher than they were a year ago, at £218,134 compared to £217,622 a year ago
- Six consecutive months of stable or rising prices suggest a consistent and solid recovery in the UK housing market
- Houses and larger properties are supporting this recovery, while flats and entry level properties are still showing annual price falls, creating opportunities for First Time Buyers
The recovery is being spearheaded by estate agents listing houses and properties at the upper end of the market, while flats and first time buyer homes continue to record annual falls. 'Home-mover' house prices, i.e. those properties with 3, 4 or 5 bedrooms suitable for existing homeowners moving up the ladder, are 6.61% higher than a year ago, while entry level properties (studios, one and two-bedroom homes) are 4.6% lower. This is likely to reflect the fact that many existing homeowners still have substantial equity in their properties, so are able to access the mortgage market fairly easily despite tighter lending criteria.
First time buyers have also been hardest hit by the retracted employment market, reducing demand for entry level homes and therefore impacting values. The average value of houses on the site is currently £239,379, 1.1% higher than a year ago, while flats are 2.17% lower than a year ago at £174,318.
Falling prices at the lower end of the market have opened up an opportunity for first time buyers, who face an 'Affordability Gap' which is £11,148 smaller than at the start of the year. The Affordability Gap - the cash deposit needed to a buy a typical First Time Buyer home after obtaining a mortgage achievable with average First Time Buyer household income - has plummeted since January but now appears to be bottoming out as UK house prices stabilise, suggesting now is the time for First Time Buyers to enter the market. They currently need to save 1.74 times their gross annual household income, compared to 2.18 times at the start of the year.
Michael O'Flynn, Director of FindaProperty.com, said:
"Movement into positive annual growth in property prices is the news homeowners have been waiting for and suggests the UK housing market is making a sustained recovery. There is no doubt that lending criteria remain an issue, but most existing homeowners are still able to access the mortgage market using the equity they have built up over the years."
"This may be the ideal time for first time buyers to enter the property market, as the affordability gap has declined drastically since the start of 2009 and now appears to be bottoming out. But while first time buyer affordability is clearly improving, they remain constrained by the income multiples offered by lenders and still need to raise very substantial deposits amounting to more than a third of the value of the property they wish to buy. The majority of those who are able to seize this buying opportunity will still be relying on the Bank of Mum and Dad to raise the money they need."
Notes to Editors
Using the Index
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For further press information please contact The Wriglesworth Consultancy:
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