The new seller average asking price now stands at £235,741, the highest in February since 2008, just £2,115 shy of the February record set in 2008 prior to the collapse of Lehman Brothers. There are also encouraging signs of life among home-movers too as the Rightmove website recorded its busiest ever month in January.
However, Rightmove research indicates that those most likely to buy and sell in 2013 are the ‘old hands’ with greater access to equity and finance, who have the confidence and the will to move. Seven in ten (71%) who intend to sell in 2013 are over 45 and half of those planning to buy in 2013 (49%) will do so for at least the third time.
There are encouraging signs of market activity as Rightmove sets new records for website activity and volume of enquiries in January, suggesting high levels of engagement.
Ben Thompson, MD Legal & General Mortgage Club reacts to the latest Rightmove monthly house price index:
“It is pleasing to see that the latest Rightmove monthly house price index has shown an increase in house prices. Despite this all indicators are that the housing market is set to remain broadly flat in the short-term. Data from a Legal & General research report ‘The New Normal in the Housing Market’ predicts things will stay this way until mid-2013, after which house prices should start to climb, reaching their 2007 peak of £227,000 by 2015.
"Our data also suggests that homeowners can expect an average growth of 4.1% per year between 2017 and 2027, compared to 11.4% house price growth per year in the decade before the crash (1997 to 2007). In nominal terms, the value of the average house in the UK is expected to increase by £12,000 per year between 2017 and 2027. Although we will see growth in house prices between 2010 and 2019 it will ultimately be at the lowest rate since the 1950s.
"The major factor in this relatively slow recovery rate is a combination of shaken consumer confidence and on-going restrictions from lenders on borrowing. There is still a lack of products available to many first time buyers and although many lenders are now consciously improving and loosening lending criteria, this isn’t something that can be transformed overnight and will take time to feed through. We are moving in the right direction but all indicators point to full recovery being a fairly long process.”
