If you follow the news you could be forgiven for feeling rather confused about the state of the property market. One minute you’re told house prices are falling, mortgage availability is dropping off and the market is stagnating. The next we hear house price inflation is on the up, first-time buyers are celebrating high loan-to-value mortgages and profits are there to be made.
Back in May, property prices only rose by 0.1% and the number of mortgages was down, especially for people already established in the property market. But then we hear that in June, the amount being lent by banks grew by 15% on the previous month to reach £13.1 billion. This is the highest level since December.
But, net lending is down by £1.2 billion and the overall number of mortgage approvals is down from 51,000 in May to 48,000 in June. This is largely as a result of tighter lending conditions and weaker consumer and banking confidence.
So, how then can the number of house sales increase in the same month? According to HM Revenue and Customs, the number of homes sold in the UK in June rose by 21% from May to 86,000. This represents the highest monthly amount of sales this year, up 15% on the same time last year.
This means that sales in the first six months of 2010 are 21% higher than the same period in 2009. But with increasing numbers of houses coming onto the market since the abolitions of HIPs in June, property prices could slip again in the second half of 2010.
So what should you do if you are looking to buy a property any time soon? Firstly, don’t be put off by whatever the news is telling you. National averages mask regional variations, in some places houses prices are rising by over 15%, whereas in other places they are actually falling.
But also, if you are buying, the fact that property prices are still subdued means you are likely to get a better property for you money now than you could in 2007. Now, is actually a buyers market. With more properties on the market, you not only have more choice but more purchasing power.
If you already have collateral in a property, then make the most of the low interest rate and lock in a fixed rate deal before the end of 2010. Many economists believe the Bank of England will have to raise the 0.5% interest rate before the end of the year to deal with rising inflation, so lock in a good deal now.
Santander offer an award-winning range of mortgages with some of the best rates on the market.