View more on these topics

House prices increase by 2.2% in May, Halifax index reveals

House prices increased by 2.2% in May taking the average UK house price to £157,849, the latest Halifax house price index reveals.

The survey also shows that the number of first-time buyers as a percentage of all homebuyers dropped back to 28% after successive increases in February and March. This proportion remains well below the long-term historical average of nearly 50%. The total number of first-time buyers is likely to remain low this year following a 33% drop in 2003 to 355,000 due to the difficulties many potential first-time buyers are facing in getting onto the housing ladder.

Halifax says it expects the housing market to begin to slow later in the year and into 2005 and that the cumulative effect of the increases in interest rates since November alongside other potential increases this year should constrain housing demand. It says the increasing difficulties that face aspiring first-time buyers should also exert downward pressure on housing demand, including in the North where there has been rapid house price growth in recent years.

Martin Ellis, chief economist at Halifax, says: “Strong housing demand, together with supply shortages, is maintaining house price inflation at a high level. The market has remained strong in northern England and Wales so far this year and house price inflation in the South has picked up following a significant slowdown during 2003. We expect the North and Wales to continue to outperform the rest of the country over the remainder of the year, resulting in a further narrowing in the North/South divide.

Higher interest rates and the increasing difficulties that face aspiring first-time buyers should, however, exert downward pressure on house price inflation later in the year and into 2005, including in the North where there has been rapid house price growth in recent years.”

Recommended

New landlords urged not to rush into tenancy agreements

Prospective landlords attending last weekend&#39s Invest in Property Show in London were warned that short cuts could prove costly when entering into tenancy agreements. Speaking at the buy-to-let seminar, Tim Wakelin of letting insurance specialist Letsure, pointed out that failure to take up references on prospective tenants could lead to months of unpaid rent and […]

Mortgage Next launches DIP facility for AR applications

Mortgage Next has launched a decision in principle facility which it says enables brokers to quickly establish if their application for appointed representative status is likely to be successful. The DIP form, which Mortgage Next says is the first of its kind, requires brokers to answer 12 short questions and can be completed in a […]

Nationwide announces changes to valuation fee structure

Nationwide has announced it will be changing its valuation fee structure from June 10. Nationwide says following this change, the mortgage valuation fees for home buyers will remain competitive. There will be no change for remortgage borrowers and existing customers applying for additional borrowing, who do not have to pay a valuation fee. The fees […]

CA exposé excluded brokers

No IFAs or independent mortgage brokers were included in the survey by the Consumers Association for Which? that accuses the financial services industry of being “rife with poor advice and questionable sales tactics”. The year-long undercover investigation, the results of which were published last week, limited its research to 39 banks, building societies and estate […]

Can UK companies satisfy global appetites?

By Mark Martin, Manager of Neptune UK Mid Cap Fund

Rapid economic and income growth is leading to a dramatic shift in diet towards protein products right around the globe. UK companies such as Genus, the world’s largest livestock breeder, are benefiting from this increasing demand. Mark Martin, manager of the Neptune UK Mid Cap Fund, discusses this investment theme.