House Price Update to 1 September 2010

UK House Prices Situation: Prices up marginally in July

UK House Prices Forecast: No significant overall gains this year

Prices Up 0.4% in July – Land Registry

The latest figures from the Land Registry show that house prices in England and Wales rose by an average of 0.4% in July. The Land Registry's house price index is based on completed sale prices and includes all properties bought and sold in England and Wales, making it highly accurate but several months behind some other popular indices.

July's 0.4% rise brought the annual rate of change to 6.7%, according to the Land Registry. Of the ten regions, six experienced house price growth in July and nine have experienced growth over the last year – the exception being the North East. Areas that saw falls in July were the North East, the East, the North West and Wales.

First-Time Buyers Continue To Struggle

Mortgage approvals remained fairly flat in July, at approximately half the level seen during the housing boom. One reason for this is that first-time buyers – a key part of any property chain – are continuing to stay away from the market.

A new survey published by property website Rightmove has found that just 22% of first-time buyers are planning to try and buy a home in the next year – compared with 31% at this time in 2009. The news gets worse, too. The current level of first-time buyer activity is about half that needed for a healthy housing market, according to Rightmove.

The problem is that property chains cannot be formed and completed without someone at the bottom of the chain – typically a first-time buyer. A lack of first-time buyers means that homeowners who want to move up from their first homes are struggling to find buyers.

More than half of the first-time buyers surveyed by Rightmove said that mortgages topped their list of worries. Large deposits, tougher lending criteria and the fear of rising interest rates means that getting a mortgage can be difficult and intimidating – and it's putting many first-time buyers off.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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