UK House prices increased 1.4% in December according to the Nationwide House Price index. This was some 8.4% higher than in December 2012. The index also suggests that house prices are just 5% below the peak of 2007. However I would think the impact of the horrendous weather recently will alter the figures somewhat in January/February. Supply and demand is still playing a major factor with housing transactions being around 25% below 2007/8 levels, but new homes being built are around 45% lower (as at Q3, 2013).
However, the ‘next step’ home movers also need attractive propositions in order to move. There are only a handful of lenders who may consider 5% deposits to those already on the property ladder. I would hope this offering will increase in order to help the supply chain with properties being available. If rates remain high in this sector, there will be limited properties available to First Timers, and this will have a knock on effect.
Finally, the Funding for Lending scheme is coming to an end and this may possibly push up rates throughout the year. Options are still incredibly attractive at the present time. Long term fixed rates are sub 3% depending upon loan to value levels and for remortgages many lenders will pay the standard legal and valuation fees. This, along with news that one in 11 people in