House prices fall as lending levels pick up

HOUSE price rises in the UK have started to slow, while mortgage lending continues to rise.

According to data published yesterday by the Department for Communities and Local Government (DCLG), house prices only rose by 2.9 per cent during the quarter ending February 2010, a fall compared with the previous quarter when prices rose by 3.4 per cent.

Prices dipped slightly during January, according to the DCLG, but were 7.4 per cent higher in February 2010 compared with the same month last year.

Average house prices rose by 7.9 per cent in England but fell by more than eight per cent in Northern Ireland.

The findings are in line with research conducted by the Royal Institute of Chartered Surveyors (RICS), which said that surveyors remained positive about the movement of national house prices during the last three months, with sales expected to increase.

RICS found that vendor activity was starting to pick up with new instructions per month rising from 16 to 21 –?the highest number since 2007.

Meanwhile, the Council of Mortgage Lenders (CML) said yesterday that the number of loans advanced for house purchase increased by 12 per cent during February to 35,000.

The loans, valued at £5bn, point to a modest recovery in the mortgage market following a dip at the start of the year.

The CML said that January numbers were affected by the end of the stamp duty exemption in December.

CML head of research Bob Pannell said: “With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future.”