It is always worth keeping an eye on the various house price surveys published regularly by people like mortgage lenders. Nationwide Building Society has just published its House Price Index for May 2013. It shows that the price of a typical home increased by 0.4% in May and was 1.1% higher than in May 2012. According to the Nationwide research, the typical home in the UK is now worth £167,912.
Nationwide have noted that as well as rising prices a number of measures of housing market activity have also started to move higher. For example in the first four months of 2013 the number of property transactions was running at around 5% above the monthly average for 2012. Mortgage approvals have also been on the rise. If you are a landlord insurance client who bought a property recently you are probably congratulating yourself.
Nationwide believe that a number of factors are working together to give the market a bit of a boost. They point to an improvement in the availability of credit and the relatively low cost of loans. The recently announced government schemes to help home-buyers probably have something to do with this.
Nationwide caution against too much excitement about the state of the market. They say that: “Progress is likely to be gradual and downside risks remain.” They refer to the fact that while there are signs that the economy is picking up there has been some softening in the labour market. Nationwide also comment on the effect of inflation on household budgets. They say that inflation has fallen back in recent months but despite this pressure on household budgets “remains intense”. They say that in real terms, after allowing for inflation average weekly wages have been falling.
If you are thinking about buying or selling a property in the near future surveys like this can be fascinating reading. Should you do a deal now or hang on for a better deal later on? Of great interest to landlords is what the future holds for demand from potential tenants. There is no point in buying a new buy to let if you can’t get tenants at a decent rent.
For full details of Nationwide’s House Price Index visit www.nationwide.co.uk/hpi
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