The UK housing market appears to be gaining momentum as Halifax announced house prices have risen by 1.3% in January 2013 compared to January 2012. This is the first annual improvement in 27 months.
As such, there are positive signs in the market according to Martin Ellis, housing economist at Halifax. He points out that property sales are at their ‘highest for five years.’ This could see further improvements due to ‘rising mortgage approval numbers.’
However, this does also come with reports that property values have fallen by 0.2% compared to December. This suggests that the future of the housing market is ‘more unclear than usual’, as Ellis comments. This may be due to the significant improvements in the market that could be limited by ‘subdued economic growth.’ According to Ben Thompson of Legal & General Mortgage Club, the problems in the housing market are not ‘something that can be transformed overnight.’
Some optimism remains as Peter Rollings, CEO of the estate agents Marsh & Parsons, believes that the Funding for Lending Scheme (FLS) is helping a variety of mortgage applicants, including first time buyers. However, the FLS appears to primarily benefit those who can provide a larger deposit. In London, prices have risen by 8.4% to an average price of nearly £460,000, while in the North West prices have fallen by 3.5%. It may be that in the optimistic 2013 housing market, mortgages for professionals are the driver of growth.