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 £125,000 threshold for when you start to pay SDLT was introduced again on 1 January 2010. The previous starting rate was £175,000 – for purchases made between 3 September 2008 and 31 December 2009.

If you buy a property in the UK over a certain purchase price you have to pay Stamp Duty Land Tax (SDLT). This is charged on all purchases of houses, flats and other land and buildings.

If you buy either a freehold or a leasehold property and the purchase price is more than £125,000, you pay SDLT of between one and four per cent of the whole purchase price. If the purchase price is £125,000 or less you don’t pay any SDLT.

See the table below for more detail.

SDLT Disadvantaged Areas Relief

If you buy property in an area designated by the government as ‘disadvantaged’ you may qualify for Disadvantaged Areas Relief. In this case the threshold for SDLT is £150,000.

Disadvantaged Areas Relief did not apply for residential property purchases between 3 September 2008 and 31 December 2009 inclusive. The threshold during that period was £175,000 which is higher than the previous Disadvantaged Areas Relief threshold. You can check the HMRC website to see if the property you are buying is in an area designated as disadvantaged.

According to a Nationwide report House prices rose in all regions except Northern Ireland during the fourth quarter of 2009, southern regions continued to experience stronger growth than northern regions and London saw the strongest growth in the quarter and also over the year. 
 
Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:
“The final quarter of 2009 saw a slowing in the quarterly rate of house price growth across the majority of UK regions, but most regions ended the year with average prices higher than at the end of 2008. For the UK as a whole, prices rose by 1.6% in the fourth quarter, leading to an increase in the annual rate of change from -3.0% in the third quarter to +3.4%.

“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.”

The Bank of England’s Monetary Policy Committee (MPC) has announced that the base rate of interest has been frozen at a historic low of 0.5% for the ninth month in succession.

The MPC also voted to continue with its programme of Quantitative Easing (QE) – which was extended by an additional £25 billion last month to £200 billion – a move welcomed by businesses who believed that the economy would stall without it.

According to Nationwide House Price Index for November 2009, house prices increased by 0.5% – the same rate as in October.

The Lender also reports that year-on-year house price inflation has increased from 2.0% to 2.7%, and states that the Labour market has so far held up better than expected this year.

Commenting on the figures Martin Gahbauer, Nationwide’s Chief Economist, said:

“The monthly rate of house price inflation for November is at a seasonally adjusted 0.5%, leaving the average price of a typical property 2.7% higher than a year earlier. At £162,764, the average house price is at a similar level to where it was in early 2006.

The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8% in September. This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.

“The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected.

With the UK experiencing its longest and deepest recession since WWII, most economists expected unemployment to increase very sharply in 2009, perhaps breaching the psychologically important three million mark by the end of the year.

While unemployment has indeed increased noticeably, the rise has not been as rapid and pronounced as previously feared. Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up.”

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 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.