According to Nationwide, UK house prices are now less than 10% short of what they were back in the boom of October 2007.

House prices are being pushed up by a lack of properties available and last month saw prices rise by 0.5%.

April saw a rise of 1.1% and March an increase of 1%, despite very little overall activity within the housing market.

The slow but steady increased means that the average house price now stands at £169,162, just 9.5% below the peak of October 2007.

February 2009 saw the lowest house prices, sitting at 19.3% below the prices of October 2007. Since then, they have risen 12.2%.

Although more sellers are returning to the market, transactions volumes are still thin on the ground. The rate of growth dipped to 9.8% in May, down from April’s 10.5% and this has caused house prices to increase.

‘Supply and Demand’ is still relatively steady with some small growth. It has been suggested that this is due to Home Information Packs (HIPs) being removed from the buying process, and tempting more buyers to the market.

However, the Bank of England is under considerable pressure to increase the base rate, due to rising inflation. If this happens then interest rates will rise and activity within the housing market will slow down.

Many people are holding back on making big financial decisions like buying a house until the new Government announces it plans in an Emergency Budget on June 22. Until then, it is anyone’s guess as to which way the housing market is going to go.

UK property website Rightmove claims that house prices have risen slower in May than in April – a sign that things could be levelling out.

House prices went up 2.6% in April and only 0.7% in May according to Rightmove, indicating that things could be cooling off.

In the week before the General Election there was a huge influx in the number of new sellers, the biggest in fact since June 2008. However on the flip, there was a sharp rise in the number of unsold properties, due to a lack of mortgage financing options for buyers, especially first time buyers.

Despite the dip in housing prices, the unavailability of mortgage products means that few are able to get onto the property ladder. Sellers are reducing asking prices, but it is not enough to bring back the volumes needed to restore the housing market.

The London housing market took a different turn this month with a 0.4% dip in asking prices. The market here is more affected by overseas buyers and ‘financial sector cash bonuses’, so this was the first fall since December.

Rightmove has a good overview of the market with around 90% of properties for sale in Britain going through the website. Only the next few months will give a clear indication of exactly which path the UK housing market will take.

New rescue package to help bank’s start lending again. Gordon Brown will announce plans to guarantee mortgage lending tomorrow. Will this be the news first time buyers have waiting for?

Banks need to start lending again to prevent the housing market sliding further. With little or no confidence in house prices most buyers are sitting on the fence waiting for prices to stabilise before they risk purchasing their next house. This is unlikely to happen until credit becomes available again.

There is hope that the Governments new attempt to stimulate the mortgage market will prevent the housing market crashing even further. Ever since securitisation collapsed in 2007 lending has dried up all but for a few customers with the best credit records and a large deposit.

 The new bail out package which has been recommended by ex-bank boss Sir James Crosby is specifically aimed at boosting the mortgage market. This in turn would help property prices stabilise. It’s the shortage of affordable mortgage loans that is contributing to the slide in house prices. First time buyers have been priced out of the market.

If you want to know more about first time buyer schemes, then contact Click n go Mortgages here.

The Council of Mortgage lenders (CML) have reported that their was only 33,000 new loans granted in November, that’s a 17% reduction compared with last month. First time buyers are finding that they have to put down a large deposit. On average a first time buyer has to put down an 18% deposit of the properties value.

Larger deposits protect lenders from falling house prices. For 95% or even 90% mortgage products to find there way back into the mortgage tables house prices will have to stabilise. When you take a mortgage out the property is used as security against the loan. Banks are restricting there lending to the lowest risk investments therefore providng a wider margin of equity as protection.

The CML predicted that lending would fall further in the next few months.

“Limited mortgage funding and reduced consumer demand will weaken lending activity further in coming months,” said the CML’s director general, Michael Coogan.

“The flow of funds to the mortgage market will not improve this year without further intervention by government,” he warned.

Borrowers are being advise to use any savings from mortgage rate reductions to reduce there loan thus decreasing there loan to value against there property. By doing this you will stand a better chance of getting the best mortgage deal available when your current deal comes to an end.

If you want to know more about first time buyer schemes, then contact Click n go Mortgages here.

October house price fell by 2.2% in October, which pushes the overall figure to 13.7% for the house price drop for the past year according to Halifax.

The average cost of a home in the UK is now set at £168,176 which is nearly £30K less than it was a year ago.  This means that we are looking at prices as they were in October of 2005.

The market, according to lenders, is challenging because of the economic strife and the dearth of mortgages.

Nationwide have reported a drop of 14.6% in house prices over the past year, whilst simply comparing prices suggests a 15% drop.

Despite the continuous speculation that the housing market is going to get worse before it gets better, the Halifax’s chief lender thinks that there are signs of the market starting to stabilise as house prices become more affordable.

The price of a house in comparison to earnings ratio has fallen below 5.0, which is the first time in 4 years.  There is hope that the ratio will improve further over the forthcoming months.

House prices are now falling at a faster rate than that of the recession in the 90s and will mortgage lending at an all time low, it is likely that this will continue.Interest rates have been cut by the Bank of England, which should give relief eventually to high street rates.  At this juncture the problem is not so much the fact that mortgages are tough to pay back, but the fact that the size of the deposit that is needed to get a mortgage in the first place is often out of the reach of many.

The credit crunch has seen a turn-around for lenders with many only preparing to lend to borrowers with significant equity in their existing homes or those who are able to put down sizeable deposits.  Banks and building societies are set to restrict their lending more over the forthcoming months for those who are first time buyers, making the Governments Shared Ownership and New HomeBuy Schemes more inviting.

The days of 100% and even 95% have gone and most deals will require a 15% deposit, so for many Shared Ownership is providing a life line to the property ladder.

If you want to know more about shared ownership schemes, then contact Click n go Mortgages here.