UK House Prices Show Annual Growth of 6.61%

Reuters recently reported that according to the House Prices and Affordability Index, compiled by one of the British property web-sites, UK house prices have shown the first positive annual growth in 2009 as currently average house prices of British properties are £512 higher than in the year of 2008. According to the House Prices and Affordability Index, the increase in property prices was caused by 6 months of consecutive rises or stability in house prices all across the United Kingdom. The continuous growth of house prices, in its turn, was caused by increased buyers’ activity as UK residents and foreigners took advantage of low property prices and weak sterling. The major issues highlighted in the House Prices and Affordability Index include the following:

• An increase in national house prices from £217,622 in 2008 to £218,134 in 2009
• Continuous stability and/or increases in UK house prices, signifying the recovery of UK property market
• Price increases are true for houses and commercial properties, while national prices for flats still show a decline, which is good news for first-time buyers.

The Index also showed that the recovery of the British housing market is being led by country’s estate agents who mainly report the sales of houses, which are priced higher, rather than flats, which are priced lower. It is also interesting to note that house prices on large properties such as 3-, 4-, and 5-bedroom houses, which are oftentimes referred to as “home-mover houses” have significantly increased from last year’s level and are now priced 6.61% higher than in 2008. Meanwhile, small properties such as studios or 1-bedroom houses are priced 4.6% lower than at the same time last year. The increase in house prices of large properties suggests that a large number of UK borrowers still turn out to have enough equity in their houses, meaning that they have an opportunity to access attractive mortgage deals in spite of the strict lending criteria introduced by UK banks.

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