According to Nationwide, average house prices have increased in May by 0.5% (month on month). With the annual rate of house price inflation now 9.8%, compared to May 2009.

Martin Gahbauer, Nationwide’s Chief Economist said:

The price of a typical UK property rose by a seasonally adjusted 0.5% month-on-month (m/m) in May, following a 1.1% increase in April.  The smoother 3 month on 3 month rate of increase rose from 1.1% in April to 1.7%, as February’s fall in house prices dropped out of the most recent three month average.  The annual rate of house price inflation dropped from 10.5% to 9.8%, which reflects the weaker pace of increase in May 2010 relative to May 2009.  Since reaching a trough in February 2009 – following a drop of 19.3% from their October 2007 peak –  house prices have risen by 12.2% and are now just 9.5% below the October 2007 peak.

“Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months.  The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”

According to the Halifax house price index the price of the average UK home rose 1.1 % In March.

This was the eighth rise in the last nine months and the March rises pushed prices up 9.1 per cent since hitting their lowest point in April 2009.

Martin Ellis, housing economist, said the rate of growth was still slowing overall after the return of the £125,000 Stamp Duty threshold and poor weather at the start of the year.

He said: “There are signs that an increase in the number of properties available for sale is beginning to reduce the imbalance between supply and demand. This should help to contain the upward pressure on house prices.”

The average house price is now £168,521.

In addition, Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – fell by a seasonally adjusted two per cent between January and February following a much larger decline of 17 per cent in the previous month.

However, the temporary increase in the lowest stamp duty threshold announced in last month’s Budget will mean that most first-time buyers do not pay the tax.

At £250,000, more than nine in ten first-time buyers would have been exempt from paying stamp duty in 2009 compared with just over one in two if the lowest threshold had been £125,000. The southern
regions of England will benefit most. Around three-quarters of first-time buyers in Greater London and the South East will be removed from the stamp duty tax net as a result of increasing the threshold from £125,000 to £250,000.

The September data from Land Registry’s House Price Index shows that house prices in England and Wales have increased with a monthly house price increase of 0.9% up from 0.5% in August.

In Pembrokeshire house prices increased by 1.2% in September. The average house price is now £148,698.

The average house price in England and Wales is now £158,377. This is an annual drop of -5.6%, up from a low of -16.3% in February.

London experienced the greatest monthly price rise with a movement of 1.3 per cent. The average property price in the capital is now £314,954. All regions experienced a decrease in their average property values over the last 12 months.

The region with the most significant annual price fall was the North East with a movement of -8.2 per cent. Neath Port Talbot experienced the greatest annual price fall with a drop of 18.7 per cent.

The most up-to-date figures available show that during July 2009 the number of completed house sales in England and Wales rose by 9 per cent to 57,579 from 52,628 in July 2008. Monthly sales in England and Wales have risen steadily each month since January 2009 when they stood at 26,662.

According to a new report from Abbey Mortgages, First-time buyers could be better off buying a property than renting.

According to the report 1.61 million people said they were looking to buy in areas other than London. With average monthly rent coming in £434 for these regions, and average mortgage payments on a property with a 25% deposit coming in at £382, anyone buying could see themselves making a £52 saving each month.

New research has revealed that buying a house is cheaper than renting in every region in the country apart from the capital, where renting is still a cheaper option.

The report suggests that renters outside the capital could save a collective £1bn over the next 12 months if they bought a property now, rather than spending their money on renting – appealing if you can afford the deposit.

Savings made by buying a property differ around the country, with buyers in Wales set to save £90.91 a month, while those in the North West would save £87.43 and renters in Yorkshire & Humberside could save £77.06 if they bought. The opposite can be said of people looking to buy in London, who would see £466.19 added to their outgoings a month.

While typical first-time buyer flats and terraced houses have seen a decrease in value of 9% over the past 12 months, according to Abbey Mortgages, mortgage lending has become tighter, and first-time buyers still need to find huge deposits in order to secure the best mortgage deals.

But with huge deposits needed to secure a mortgage, is it really that easy for first-timers to get their foot on the first rung of the property ladder?

According to Abbey, the average price for a typical first-time buyer property outside of London is £92,861. With most lenders requiring at least a 25% deposit, borrowers would need to stump up a whopping £23,215 to reap the rewards of buying – a sum many first-time buyers would struggle to find.

“Our latest research shows there is hope for first-time buyers. It’s now cheaper in all bar one of the regions to buy rather than rent, [which] shows that saving for that all important deposit is so worthwhile,” says director of Abbey Mortgages, Nici Audhlam-Gardiner.

With recent house price reports revealing that property prices are starting to rise again, the end of the stamp duty holiday in sight, and a lack of affordable mortgages available for first-time buyers, it may be time to look at alternatives.

Buy with friends
This could be the answer, if you can’t afford to buy on your own, buy with friends. You’ll be able to borrow more and buy a better property. But, while buying with friends provides a great opportunity to get on the property ladder, there are important factors to consider.

Generally when people become co-owners of a property they opt to be what is known as “tenants in common”. This means that each person has shares in the property. Such an agreement should take into consideration how much money each person has put into the property – both in terms of deposit and how much they pay off the mortgage each month.

Everyone is jointly responsible for the whole mortgage, so each person needs to make sure that if anything happens in their lives – such as long-term illness or job loss – they have a back-up plan to ensure their share of the mortgage is paid. There are insurance policies that can help with this.

It’s worth considering drawing up a legal agreement before the purchase is complete to cover all eventualities, such as if someone decides to move out or falls on hard times.

Buying off-plan
You can usually bag a discount if you decide to buy off-plan. Developers often sell part of their development before the building work is complete, to generate sales in order to complete the rest of the development.

If you buy off-plan you could be looking at as much as a 20% discount on the asking price. You’re basically agreeing to buy a property on the basis of plans, drawings and virtual tours, which may sound risky, but it’s common practice with many larger property developers.

Generally you’ll be asked for a down-payment of between £500 and £1,000 to reserve the plot. Exchange is usually 28 days later when you need to provide a 5-10% deposit, and then final payment will be on completion of the build – usually six to 18 months later, so there’s plenty of time to sort out your mortgage.

Bank of mum and dad
The Council of Mortgage Lenders (CML) put the average first-time buyer house price at £123,000 in July 2009. Raising a deposit is the biggest obstacle when it comes to buying a first home.

The minimum deposit required for a property costing this much would be at least 10% (£12,300) or up to 25% (£30,750) to obtain some of the best rates. So it comes as no surprise that some First Time Buyers, revealed that they would be turning to the “bank of Mum and Dad” to help finance their deposit.

Other ways parents can help out with the purchase of a property is by acting as a guarantor to the mortgage company, or even entering into a joint mortgage. It’s worth taking advice on any of these suggestions as there are tax implications.

Shared ownership
In essence participants of the scheme buy a share of a property through a mortgage and pay for the rest through a capped-rate rent paid to a housing association. The size of the share varies but usually starts at 25%. Obviously the higher the share, the less rent there is to pay. The plan is that over time, you incrementally increase your share (known as “staircasing”) until you – and your mortgage provider – own the property outright.

Homebuy Direct is the latest scheme to be launched where buyers are offered an equity loan of up to 30% of the purchase price, co-funded by the Government and the developer. HomeBuy Direct is aimed at first-time buyers where households earn less than £60,000 per year.  

To apply for a scheme, find out if whether you are eligible to buy a shared-ownership property, or to seek further information visit Homebuy.org.uk.

According to the Halifax House Price Index, house prices have gone up for the third consecutive month.

The Index shows that house prices rose by 1.6% in September. Over the last 3 months (Quarter 3) they have risen by 2.8%, the first quarterly rise for two years (2007 Quarter 3) and the biggest since 2007 Quarter 1 (2.9%).

It is the third consecutive month house prices have gone up, giving an annual change of -7.4%, up from a low of -17.7% in April.

Martin Ellis, housing economist, said: “The combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. The marked improvement in affordability due to the reduction in both property prices and interest rates since mid 2007 has been a key factor in stimulating higher demand.”

“Continuing increases in unemployment and low earnings growth are likely to constrain the rise in demand. There are also some signs that the improvement in market conditions is encouraging more people to put their properties up for sale. This development could loosen market conditions by alleviating the current shortage of supply and curb the pace of house price growth evident in recent months.”

Earlier this year the Government changed the nil band rate for Stamp Duty, for property purchased,  from £125,000 up to £175,000.

However, this is only a temporary measure with the concession expiring at the end of 2009. To qualify for the savings buyers must complete their property purchasers before 31 December 2009.

Purchasers can save between £1,250 and £1,750 if they complete before the deadline date. While a saving of between £1,250 and £1,750 may appear small, in the context of a much larger purchase price, this still represents a considerable saving for any purchaser.

With deals taking on average three months to complete, time is running out before the end of December and therefore it is up to all parts of the chain to ensure the process works as efficiently as possible.

Advisers at 1 STOP Financial Services are at the centre of the transaction and will help encourage all others be they the client, estate agent, lender or solicitor to work at their optimum level to ensure the purchaser can benefit from this Stamp Duty saving.

Potential purchasers who may be considering buying should be take into account the advantages of completing before the end of the year.

Nationwide House price index has shown that House prices rose by 0.9% in September, this is the fifth monthly rise in a row.  According to the index price growth is down just –2.7% compared to last year, but down -13.5% since the market peaked in October 2007.

Martin Gahbauer, Nationwide’s Chief Economist, said: “The 3 month on 3 month rate of change, generally a smoother indicator of the near term trend, rose from 3.3% in August to 3.8% in September, the highest level since August 2004.

He added: “At £161,816, the average price of a typical UK property was essentially unchanged from a year earlier, representing the first time since March 2008 that the year-on-year rate of change has not been negative. Over the first nine months of 2009, the seasonally adjusted index of house prices has risen by 4.1%.”

“One reason to remain cautious about the outlook for house prices is that turnover in the market is still well below normal levels. The housing turnover rate – measuring the percentage of the private sector housing stock changing hands on an annualised basis – fell to only 3% at the end of 2008. Although the turnover rate has since recovered to nearly 4%, there is still quite some way to go before turnover reaches the pre-downturn level of between 7% and 8%.

Michael White, chief executive of online mortgage advisers Email Mortgages.com, said: “To talk of an average UK house price is always something of a red herring given the UK is very much a regional housing market – some homeowners, for example, those in the London commuter belt, will have seen their property bounce back strongly since the large falls of last year, while others have only seen a slight house price recovery.  One must expect that the recent house price increases, if they are to be maintained at all, will only be in very small increments and this will be the pattern for the foreseeable future.”

White said “the real issue for the UK housing market continues to be the low level of mortgage lending by the banks; a recent Bank of England Credit Conditions Survey for quarter three outlines what anyone working in the mortgage market has known for some time, that lenders have not increased lending to businesses or individuals as previously promised, instead lending has been cut.  Given the small number of lenders currently active in the market it is therefore unsurprising that many potential house purchases are not going ahead because of the difficulty accessing mortgage finance; a particularly acute problem for first-time buyers.”

The rate which banks lend to one another, the London Inter Bank Offered Rate,  fell again this week to ’0.57%’ and with Bank of England interest rates remaining at ’0.5%’, many industry experts are calling on lenders to drop mortgage rates.

Michelle Slade, a spokesman for Moneyfacts, said:
“Lenders are taking, what appears to be an excessive margin for risk from those homeowners that are struggling the most. Falling house prices has dwindled away the equity in their homes and they are being dealt a further blow by having to pay mortgage rates at similar levels to those available two years ago when bank rate was 5.75 per cent.

“Libor and bank rate are at an all time low, but tracker rates, similar to fixed rates have not fallen in line. The margin taken on trackers has moved to an all time high as lenders are concentrate or repairing their balance sheets rather that helping borrowers.”

By comparison, those with a 40% deposit have seen a 1.86% reduction in the average mortgage rate.

Borrowers with a 10% deposit taking out a new two year deal on a £150,000 mortgage will only see their monthly repayment fall £11 from £988 to £977, while those with a 40% deposit see a reduction of £165 per month from £998 to £833.

Michelle Slade, spokesperson at Moneyfacts.co.uk, commented: “A higher margin for risk is expected on a 90% LTV deal, but a 4.25% margin over the cost of funding seems excessive and difficult to justify.

“Sub-two percent rates are being advertised by lenders, but we have no way of knowing how many borrowers actually qualify for these deals. Having been tempted through the door, many are likely to be offered much higher rates.

“First time buyers, once seemingly the lifeblood of the property market are now apparently being ignored as lenders continue to cherry pick lower risk borrowers.

“It appears borrowers searching out a new deal are paying a higher price to subsidise existing customers, many of which are paying record low rates.”

Contact 1 Stop Financial Services were one of our advisers can discuss your options and guide you in the right direction.

As expected, the Bank of England decided at today’s monthly meeting of its Monetary Policy Committee (MPC) to maintain its key interest rate at 0.5%. The base rate has now been at that level, a record low, since March this year.

The Bank of England has chosen to hold the base rate at 0.5% for the sixth month in a row. The decision by the monetary policy committee (MPC) came as no surprise to experts who predict that interest rates will stay low until next summer.

Seasonal factors resulted in August being, as usual, a relatively quiet month for mortgages – even by this year’s standards. This, coupled with lower Libor and swap rates, has resulted in some lenders making modest cuts in their mortgage rates which can only be good news for consumers.

The Committee also voted to continue with its programme of asset purchases totalling £175 billion financed by the issuance of central bank reserves.