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House prices increase by 1.4% in November

Prices have increased by 8.5% since reaching a trough in April 2009; an increase in the average price of £13,174. This follows a decline of 23% between August 2007 and April 2009.

House prices in November were 1.6% lower on an annual basis. The annual rate of change (measured by the average for the latest three months against the same period a year earlier) has improved significantly from a low of -17.7% in April

Completed house sales in England and Wales were 11% higher on an annual basis in August, according to the latest Land Registry figures. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – increased, on a seasonally adjusted basis, for the eleventh successive month in October.  Approvals were 79% higher than in October 2008 and were at their highest level since March 2008.  Despite this improvement, approvals remain 56% below their late 2006 peak.

The increase in sales in recent months has outpaced only a modest rise in the stock of properties available for sale.  As a result, the ratio of house sales to the stock of unsold properties on surveyors’ books increased for the tenth consecutive month in October.  (Source: RICS monthly survey, October 2009.)  The increase in this ratio suggests that market conditions will provide further support for house prices in the short-term.

Martin Ellis, Halifax housing economist, said:

"House prices increased by 1.4% in November.  This was the fifth successive monthly rise with prices more than 4% higher over the first eleven months of the year. 

The recovery in house prices since the spring has been driven by increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers who can raise the necessary deposit. 

Somewhat higher demand has combined with a low level of properties available for sale to push up prices.  Further ahead, the prospects for the market will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our view is that house prices will be flat during 2010."

James Hyman, Partner for Residential Sales at property consultants Cluttons said:

"Halifax’s figures suggest sellers are still in the driving seat, as the stock of property for sale remains extremely limited, forcing prices upwards. I expect to see this change rapidly in the New Year as as people who have held off selling over the past year or so are encouraged to come to market by rising prices, which could in turn bring about a second dip in property values."

However Jonathan Moore, Director of Easyroommate.com said:

“This is another blow for first-time buyers who missed the boat this year when house prices bottomed out earlier this year. Not only have prices begun to spiral out of reach again, but they are still largely frozen out of the mortgage market.  Many would-be homeowners fear they’ll never manage to get a first foot onto the property ladder. But – all is not lost. Thousands of first-time buyers – those who have managed to get mortgages at least – are using flatshare to help pay the mortgage on newly resurgent house prices. For a typical first-time buyer, renting out a room can pay more than half the mortgage on a monthly basis.  Thousands more are sitting it out in shared rented accommodation saving hard to get the deposit they need.”

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