Optimism in Huddersfield housing market

Aug 28 2009 by Henryk Zientek, Huddersfield Daily Examiner

ESTATE agents in Huddersfield sounded a cautious note after figures showed house prices up for the fourth month in a row.

A survey by Nationwide Building Society said the average price of a home in the UK rose by 1.6% during August – the biggest monthly increase since December, 2006.

The latest increase means house prices are now just 2.7% down on a year ago.

The survey said the price of the average house was now £160,224 – up 3.2% on the start of 2009, but 14.4% below the peak in October, 2007.

Nationwide chief economist Martin Gahbauer said “exceptionally low” lending rates had meant lower mortgage repayments for existing homeowners – making it easier for people made redundant in the recession to continue to afford their home loan.

As a result, fewer people have been forced to sell their home than would normally be the case during a recession – contributing to a shift in the balance of supply and demand in favour of sellers during 2009.

Low interest rates had also helped make property more affordable for first-time buyers.

The latest figures on the property market come just days after the British Bankers’ Association said the number of mortgages approved for house purchase rose to a 17-month high during July.

The Council of Mortgage Lenders reported a 26% rise in mortgage lending in July to its highest level for nine months, as buyers continued to return to the market.

Raymond Butterworth, of town centre estate agents Boultons, said: “At the moment, house prices appear to have stabilised, but at a level 15% to 20% below the peak of 2007.

“We have sustained a reasonable level of sales of the last four months at about 30 a month – which is back to ‘normal’ as far as we are concerned.

“We had become accustomed to an even greater number of sales in the past three or four years – but that was quite exceptional.”

Mr Butterworth said the first-time buyer market was not operating properly because lenders were very stringent on the amount they would lend and the borrowing terms they applied.

Tony Wright, partner at Carter Jonas, which has an office at Slaithwaite, said the Nationwide figures supported the view of many in the industry that now could be the perfect time to sell – while property is still in short supply and money is still cheap.