Average house prices have continued their “modest decline” according to the latest monthly survey from Halifax. But the market is benefitting from a number of factors – including the affordability of mortgage payments.
The lender’s figures show that house prices fell 1.4% in April, leaving the price of a typical home at £160,395. The fall contributes to an annual decline of 3.7%. Prices remain above levels seen in the spring of 2009 – but down by as much as a fifth on those at the peak of the market in 2007.
In spite of the fall, Halifax economist Martin Ellis detects signs that the housing market is stabilising. One big factor supporting demand – continued low interest rates, which have dramatically cut the burden of servicing mortgage debt for many. According to the lender, typical mortgage payments for a new borrower equate to 29% of average disposable earnings – down from 48% in 2007.
Meanwhile, there are signs of more activity, with some increase in sales, and a rise in the number of mortgages approved for house purchase.
Nevertheless, doubts about the economy, and the pitfalls of today’s mortgage market are still holding back demand. A spokesperson for RICS (Royal Institution of Chartered Surveyors) commented , “Although there are signs that some lenders may be reducing their grip on the purse strings . . . there is still a long way to go before lending levels increase enough to have any real impact.”
In that climate, the expertise of a broker with a perspective on the whole market can be crucial in locating the right mortgage deal for the individual borrower. Homeowners who prefer to steer clear of the property market could also capitalise on the reduced burden of mortgage interest payments, with some of the attractive remortgage deals available.
Tags: Economy, Housing Market, Mortgage Rates, Remortgage
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