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.”

 Santander has started the rebrand of its Abbey and Bradford & Bingley branches, with 1,000 Abbey and B&B branches to be renamed Santander by end-January.

 The rebranding in the UK is in line with Santander’s policy of operating under the Santander name and brand image in all the markets in which it is present. Since the unified brand was introduced in 2005, Santander has rebranded in all its key markets, including Spain, Portugal, Germany, Brazil, Mexico, Chile and Argentina.

Emilio Botín, chairman of Banco Santander, said: “This is a historic day for Santander as its name is firmly established on the UK high street.

“When Santander acquired Abbey in 2004, there were some who doubted we could make it a success. Today, there can be no doubts. Over the last five years we have transformed our UK business into one of the most successful banks in the country. The decision to become Santander will put us in an even stronger position the UK.”

“Greater London was the best performing region in the quarter; prices rose by a seasonally adjusted 3.4%. This increase pushed the annual rate of change up from -1.9% to 7.0%, making London the best performing region over 2009.

“Outside of London, the East Midlands saw the strongest quarterly performance within the English regions, with a 2.8% rise in prices over the quarter, bringing the annual rate of change up from -5.4% to 2.5%. The Outer Metropolitan and Outer South East regions continued to see above average growth in the quarter and were the second and third best performing regions, with annual growth of 6.4% and 5.5% respectively.

“The northern regions generally saw weaker growth, in particular the North where prices rose just 0.4% in the quarter. The North was also the only English region not to see prices rise across the year as a whole, with an annual price change of -2.0%.

“House prices in Scotland rose 1.9% during the quarter, slightly above the UK average. This was enough to push the annual rate of change into positive territory, with prices up 1.0% compared to the fourth quarter of 2008. Quarterly price growth in Wales remained relatively weak in the fourth quarter, with a 0.9% rise recorded, leaving average prices marginally lower than one year earlier.

“Reversing the large increase seen in the third quarter, prices in Northern Ireland fell by 6.8% in the fourth quarter. On an annual basis, house prices were down 6.7%, a modest improvement from the 8% year-on-year fall in the third quarter. Northern Ireland remains the worst performing UK region.

Wales top performing UK country over last decade

“Despite the sharp house price falls seen in 2008 and the first half of 2009, the 2000s has generally been a very strong decade in terms of house price growth. In nominal terms, house prices in the UK rose 117% between 1999 Q4 and 2009 Q4. Taking into account overall retail price inflation over the period, prices have risen by 68% in real terms, the strongest decade on record. This compares with a 14% fall in real terms during the 1990s.

“Wales has been the top performing country over the 2000s; house prices have risen 82% in real terms.  This sharply contrasts with the 1990s, where Wales saw prices fall by 24% in real terms.

“England overall has seen the weakest growth over the 2000s of 65%, although this has varied widely across the regions. Within England, Yorkshire and Humberside has seen the strongest growth, with prices rising 84% in real terms, whilst the Outer Metropolitan region has experienced the weakest growth, with a 51% increase.

The strong growth seen in Yorkshire and Humberside might reflect that it started the decade as one of the most affordable regions, with a house price to earnings ratio of 3.0 (compared with the UK average of 3.6 in 2000 Q1).

“Whilst the strong housing market performance of the 2000s is good news for homeowners, it is less positive for those looking to get on the housing ladder. Affordability has improved since the peak in house prices in 2007, but we will enter 2010 with house price to earnings ratios across the regions at a much higher level than the start of any other decade.”

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.