UK Residential Property Prices
Return To Good Health
UK residential property prices increased again in June 2013, marking the return to good health of the property market.
Property price rises are at their fastest rate in over two-and-a-half years as mortgages became more available and less expensive, adding to fears of another property market bubble as overall housing supply remains low.
The latest monthly residential property price index from UK mortgage lender, Nationwide, shows that UK property prices were up 0.3% in June 2013, while the annual increase of 1.9% was the sharpest residential property price increase since September 2010, but those gains were below the 0.4% monthly rise and 2.1% year-on-year price increases forecast by many economists.
In May 2013, residential property prices rose an unrevised 0.4% on the month and 1.1% on the year overall, signalling the recovery of the UK property market.
The number of mortgages approved by UK banks also increased by a quarter in the twelve months to May 2013. However, over the same period, the value of outstanding mortgage loans secured on property dropped by 0.2%.
Seasonally adjusted figures from the British Bankers Association (BBA) released last week showed that the number of approved homebuyer mortgages had reached a 16-month high during June 2013, with 36,102 mortgages approved, as the UK Government attempt to stimulate the housing market with the Help-To-Buy scheme gathered momentum.
The average residential property mortgage increased by £3,000 to £159,200 (GBP), and the total value of approvals for residential property purchases rose to £5.5 Billion (GBP).
The BBA also said that re-mortgaging activity had also increased during the first half of 2013, accounting for 20,675 residential re-mortgage approvals worth £3 Billion (GBP).
The news may be good for the overall UK property market, but unless property investors take action immediately, there will be extra competition for purchasing further properties from willing buyers who are looking for another home.
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