The heart’s still beating, if not thumping, argues Dean Jones, head of paaleads.com
The MPC’s decision to keep the base rate at 0.5% would have been a welcome relief to many homeowners and, perhaps more importantly from the industry’s perspective, would-be homeowners.
Indeed, it is still widely believed that rates are going nowhere this year, and as long as this is the case, providers will gradually start to feel more comfortable about offering more competitive products.
This good news was coupled with the latest Halifax house price survey showing that prices climbed 1.1% from February’s price to £168,521 in March. This represents a 9.1% growth since the low in April 2009 and 6.9% more than this time last year.
Last week also saw data out from Acadametrics, based on actual transaction prices and using Land Registry data. This research showed the average house price in March at £227,788. From our own average transaction values, this seems high, and is well above Halifax’s index. However, the trend is clear, prices seem to have recovered from the mini bump in February.
I talked last time around about the products at affordable rates being the key to the revival and I still believe this to be so. This last week has seen Nationwide cut rates and others launch low priced trackers, as choice starts to return to the market.
So what does this mean? Clearly, lenders (state owned or not) are starting to dip their toe back in the market, and the availability of products will, I am sure, drive some of those who were waiting for concrete signs that things were back on course, to enter the market. I am not predicting a surge, but expect things to continue on a gradual growth trajectory over the coming months.
Volatility is set to be the name of the game this year however, and although I expect prices in December to be higher than that at the start of 2010, don’t be surprised if there is the odd month which sees prices drop.