Business Bytes

House prices in England & Wales defied the current economic gloom by remaining stable in November according to the latest England & Wales Price Index from LSL Property Services/Acadametrics reports Myintroducer:

David Brown, commercial director of LSL Property Services comments:

“Static house prices don’t mean property values are standing still. For buyers looking to get onto the market, 0% price growth means that in real terms property is becoming more affordable. With inflation running at 5%, the real cost of property is getting smaller and smaller, which is good news for buyers and mortgage borrowers alike.
 
“The resilience of property prices indicates that mortgage lenders and property buyers have not so far been spooked by the gloomy news emerging from the Eurozone. Although prices have declined by 0.7% since November 2010, the rate of annual price decreases slowed everywhere except the North West and the East Midlands, with London - buoyed by foreign investors seeking a safe haven in the capital’s bricks and mortar - showing an acceleration in price rises to 3.1% last month.

"Low mortgage rates, along with the stamp duty holiday on properties below £250,000 and the modest boost provided by the government’s FirstBuy scheme, have all contributed to prevent larger falls in 2011.
 
“According to the Council of Mortgage Lenders, mortgage lending increased 9.8% in the year to October and has risen for the last three consecutive months for the first time since the summer of 2007, which has contributed to the 4.5% rise in transactions seen last month. However, we’re yet to see any significant decrease in the size of the deposits lenders require. Among buyers who have substantial deposits, demand remains strong and the rise in mortgage volumes suggests many people in this position are taking the opportunity to secure good properties while mortgage finance and property prices make purchasing a more and more affordable option.”

This is good news for first time buyers as the real price of property is falling, and house owners are also benefiting from low mortgage rates. Whilst the ongoing economic forecast is glum, the housing market has performed better than expected.

Low interet rates are not good news for savers however as the real value of savings accounts are decreasing as inflation continues to erode their worth, leading people to consider other investment options.