House prices up on high volume of transactions

Ben Southwood
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HOUSE PRICES managed to creep up in November, after the month saw uncharacteristically high activity.

Prices were up 0.2 per cent on the month, according to data from LSL Property Services and Acadametrics, on the back of a five per cent rise in the number of transactions compared to last November. This put prices up 3.3 per cent on the year – a rise of more than £7,000 – the index showed.

The news comes as a separate report, released today by the Royal Institution of Chartered Surveyors (RICS) estimates that house prices will rise by two per cent in 2013.

The bullish outlook contrasts with earlier data from Halifax and Nationwide, which pointed to a decline in prices over the current year, but is in line with more cheery November data from Rightmove.

And Esurv statistics on the November mortgage market reinforce the idea that the month was relatively positive for the housing market.

The number of home purchase loans rose to an 11-month high of 53,259 in November, the surveyor said. As recently as June, the number of loans agreed had dipped to 44,192. But Esurv did not put this credit boost down to the government’s Funding for Lending Scheme (FLS). “FLS has lowered mortgage rates, but criteria failed to loosen in November, with banks content to focus on lower-risk low loan-to-value borrowers,” the report said.

It pointed out that the average loan to value on properties worth less than £125,000 actually fell, reaching 66 per cent, the lowest in 21 months, suggesting first time buyers were being kept out of the market, even after FLS.

Newnes at LSL agreed that mortgage market improvements were “top heavy”. He said: “Lenders remain risk averse and conscious of capital requirements, and those that have started to tap FLS have been directing additional funding towards buyers with larger deposits and buy-to-let.”