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Average house prices rise every month since January

All of the annualised average rates of growth continue to point to increasing market stability, with the annualised monthly growth now at 3.3%, the six month annualised rate at 3.5% and the three month rate of growth at 2.3%.

Stuart Law, Chief Executive of Assetz, said:

"GDP figures released this week show that economic conditions are faltering but still positive with a strong services sector, falling unemployment and strengthening house prices combining to present a brighter economic outlook than at the start of the year.

"Looking at all the house price data together, it is clear that the overall trend is one of positive growth in the last six months, with pent up demand from people who need to move and the rapidly growing appetite of buy to let investors supporting price growth. There is no other choice of investment currently available to investors which is as safe and producing such a strong income as buy to let, with 8% gross yields being achieved in regional cities such as Manchester and Leeds. Tenant demand continues to strengthen to new highs.

"The availability and interest rates of mortgages are also improving each month, steadily reversing the finance famine which has restrained the market from an earlier recovery. Several lenders, such as Yorkshire BS, Barclay’s, Abbey, Natwest, Halifax, Northern Rock, Leeds BS and RBS have all announced reductions in their fixed rate deals over the last few weeks, making borrowing even more affordable.

"Improving market conditions could be jeopardised, however, if the Bank of England refrains from raising interest rates in a slow and measured fashion. It was too slow to reduce rates as we entered the recession, which led to a series of rapid rate reductions in an attempt to stimulate the economy. Its failure to raise rates now could result in a series of panicked rises in 2012 or 2013 to combat inflation, which would have a serious impact on consumer affordability and confidence."

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