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Housing market on course for static year

Housing market on course for static year

Category: Mortgages

Updated: 08/09/2010
First Published: 08/09/2010

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The housing market in the UK is on course for something of a static year, despite new figures showing a 0.2% rise in prices during August.

The slight increase follows a 0.7% rise in July, according to Halifax.

These latest figures will raise a cheer with some homeowners, as a number of recent reports have detailed declines in prices.

The average price of a property finished last month at £167,953, marginally less than at the end of 2009, and 16% lower below the peak of the market in August 2007.

Martin Ellis, housing economist, said that the rises seen in July and August have reversed much of the modest decline seen in the three preceding months.

"Prices are now at a very similar level to that at the end of last year. Activity has also been largely static since the start of the year," he added.

"These developments suggest that the market is broadly stable with house price inflation having cooled since last year when supply shortages helped to push up prices."

A snapshot of price trends over the last three months shows annual growth of 4.6%, slightly below the increase of 4.9% in July, and continuing recent downward movement.

The three month growth rate peaked in May, when a high of 6.9% was recorded.

Despite the uncertainty of which way house prices will go, activity in the mortgage market has remained broadly stable.

The number of mortgages approved for house purchase in the three months to July was slightly higher than the previous quarter, while the number of approvals per month in the year to date has stayed within a range of 46,000 to 50,000.

"The improving economy, strengthening labour market and low interest rates are all supporting housing demand," said Mr Ellis.

"We expect that UK house prices will remain static overall in 2010."

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