The average price paid for a house in December was £480 more, or 0.2% higher, than that paid in December, according to the latest house price index for England and Wales from LSL Property Services/Adacemetrics.
This is the eighth month in succession in which the monthly change in average prices has been within a band of +0.2% to -0.3%, the cumulative total over this period being +0.3%.
The average price of a home is now £227,478, according to the study.
“January’s figures are better than expected,” said David Brown, commercial director of LSL Property Services.
“Values have climbed £7,000 in just 12 months. Sales are up 8%. And prices have increased for eight consecutive months. All of this bodes well for 2013. It’s particularly encouraging given the state of the economy.
“Market conditions are certainly improving. Funding is cheaper, thanks to a combination of the Funding for Lending Scheme and an improvement in investor confidence. And mortgage lenders have started competing for more business from high LTV borrowers, which is driving down mortgage rates to record lows. Lending criteria are becoming less restrictive, so borrowers no longer have to cross such a painfully high financial threshold in order to get a mortgage. That’s a source for optimism, as is rising employment and a mini-revival in the first-time buyer market. These are rays of light which will help brighten the housing market in 2013.”
Brown added: “But there is a more sobering sub-plot to this good news. Sales activity and prices in London are charging along at a furious pace, which is dragging national house prices up on its coat tails. The capital is in a league of its own. Take the capital out of the equation, and the average rate of house price growth in England & Wales falls to a mere 1%, reflecting a slower rate of improvement outside of the south-east. We’re seeing a three-speed housing market emerge. On the top rung are fickle foreign buyers and the ultra-prime, with London on the second rung, and the rest of the country languishing at the bottom.”
