House prices grow in November
This is according to the latest LSL Acadametrics house price index, which showed that year on year house price growth slowed yet again, down to 5.9%, and will slow further as the larger gains of a year ago fall out of the calculations.
The number of transactions in November fell by 4.6%, in the month, and are down 5.3% compared to last November. This is the second consecutive month this year in which transactions are lower than 2009 levels.
Commenting, David Brown, commercial director of LSL Property Services, said: “We have now seen prices creep upwards for seven consecutive months and this shows that there is strong demand for properties despite the considerable barriers facing buyers trying to obtain finance.
“The average LTV on a house purchase stands at 57%, which continues to hold back those without sizeable deposits – particularly buyers hoping to get on the ladder for the first time. With inflation still 1.2% over target a rate rise in 2011 is on the cards and there isn’t much chance of lending criteria loosening in the medium-term.
“Given that growth is marginal, we may see prices begin to fall slightly as these factors take hold, although it’s unlikely that any dip will be dramatic and the year-on-year drop in transactions is distorted by the end of the stamp-duty holiday in 2009.
“The market for those with a large amount of spare cash still represents good value, as more and more sellers are coming into the market willing to listen to offers well below asking price. This is stimulating demand, but in a rather disparate way around the country. In London, the last quarter has seen strong growth, with prices rising by 10%, while in the same period northern regions have registered no growth at all.
“This disparity is likely to increase following the spending cuts in the New Year as some regions will be hit much harder than others. We are likely to see London advancing further, with very limited growth in northern regions.”