UK property market improves

| March 13, 2012
UK property market improves

Signs are emerging that the UK property market is slowly starting to improve.

According to the latest figures from The Royal Institution of Chartered Surveyors (RICS), the number of house sales increased in January, helped by first-time buyers rushing to secure a purchase before the end of the stamp duty exemption on homes under £250,000.

RICs reported that average sales per estate agent branch increased from 15.7 to 16 in February.

However, house prices continued to fall during the month, but at their slowest rate for 18 months.

Surveyors are not expecting prices to fall further, and anticipate that sales will continue to increase for the next three months.

Alan Collett, RICS housing spokesman, said: “With the recent upturn in activity brought on by the end of the stamp duty holiday, it seems that a renewed sense of optimism may be slowly returning to the property market.

“However, with affordable mortgage finance still out of reach for many potential first time buyers, it remains to be seen whether the more optimistic outlook for future sales can be sustained beyond the expiry of the stamp duty holiday.”

According to The Department for Communities and Local Government (DCLG) the average UK house price increased by 0.7% in January to £206,523.

In January 35,600 home loans were approved, a 22 per cent increase compared with January 2010, but 25 per cent lower than December according to the Council for Mortgage Lenders.

Yesterday the government launched two schemes designed to boost the housing market.

The NewBuy scheme offers 100,000 mortgages on newly built homes, requiring a deposit of just five per cent of the property value.

It is designed to help first-time buyers afford a mortgage on their first home while offering lenders some protection against borrowers defaulting on their mortgage.

The Right to Buy scheme has also been re-launched, giving up to two million social tenants the opportunity to buy their council home with a discount of up to £75,000 – treble its current level in most parts of the country.

Further changes to the scheme mean that additional properties sold must be replaced with new affordable homes for rent.

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