Summer slowdown fails to materialise as house sales rise 11%

13 August 2010

Housing transactions increased for the second consecutive month in July, rising 11.1% on June to around 72,100, according to the latest research. The LSL Property Services and Acadametrics house price index showed that transaction activity has doubled since January this year, with July's increase significantly above the month's average 4.1% growth over the last 15 years. In addition, house prices rose for the first time in five months, by 0.1%, with average house prices in England and Wales totalling £220,685. This is down 4.8% from the February 2008 peak of £231,828. Average house prices have remained largely stable over the last three months, with annual house price inflation slowing to 8.1%. Acadametrics said this reflected the significant growth that took place between August to October 2009 and December 2009 to February 2010, rather than the activity of more recent months, and annual inflation will continue to fall. David Brown, commercial director of LSL Property Services, said: "House sales showed particularly strong growth in July, ahead of the usual seasonal uptick. "The influx of quality properties on to the market in recent months has alleviated upwards pressure on prices, while buyers took advantage of a slight easing in lending conditions to secure their new home." Brown said that the market is unlikely to return to a mini-boom or bust and added: "Longer term recovery is dependent on an improvement in the mortgage products on offer for first-timers. With thousands of frustrated buyers waiting in the wings, unlocking first-time buyer demand is key to re-energising the whole market." Dr Peter Williams, housing market specialist and chairman of Acadametrics, said: "We are clearly in a period of considerable uncertainty and, at best, the market is likely to continue to remain close to flat; that said, there will be strong regional and local variations. "Despite the underlying imbalance of demand and supply, there is little to suggest that we will see any strong recovery in the housing market in 2010 or, indeed, into 2011." Published by Mortgage Solutions