Signs of housing recovery as prices start to creep up

New signs of recovery in the housing market are expected today with the publication of the first indicator of house prices in February.

Nationwide building society's house price index is expected to show a moderate increase of up to 0.5 per cent after remaining flat in January, reflecting other signs of improvement in the market.

The Halifax house price index, due on Monday, is also likely to show a modest rise. This will be the eighth monthly increase running in this widely-used indicator of house prices, although the average price in February probably remained below its level a year earlier.

Optimism that the long-awaited recovery has finally arrived will get another boost within the next week from additional mortgage rate cuts and other loyalty incentives. Other building societies are expected to follow shortly Nationwide's move last week to demonstrate the benefits of remaining mutual by reducing its rates to borrowers.

Skipton and Bradford & Bingley are among the societies likely to announce further moves within the next few days. A Skipton spokesman said: ''There is no question that we will be announcing something. It is only a matter of time.''

Bradford & Bingley led an earlier round in the mortgage war. Bristol & West, Britannia and Yorkshire building societies have also announced discount schemes in recent weeks.

News of the improvement in house prices will follow new figures confirming earlier evidence of a pick-up in activity in January. Adam Cole, an economist at brokers James Capel, said: ''The recovery in the housing market is gathering pace.''

The number of new home loans approved during the month climbed to 80,000 - the highest since December 1994 - according to Bank of England statistics yesterday. Their level was 13 per cent up on last summer's trough. The figure is a good leading indicator of housing market activity.

The value of new loans approved climbed to pounds 4.92bn, up from December's pounds 4.61bn and pounds 4.56bn in January 1995.

Ian Shepherdson, an analyst at HSBC Markets, said: ''Prices and actual market volumes follow behind approvals, so provided the steady momentum shown by these figures continues, things are shaping up for the best spring

house-buying season for years.''

The Bank of England also confirmed the January pick-up in mortgage lending reported by banks and building societies. New loans amounted to pounds 1.32bn in total, the highest since June. This compared with pounds 1.16bn in December and was slightly higher than in January last year. Annual growth in home loans was 4.1 per cent.

Adrian Coles, director general of the Council of Mortgage Lenders, said the year had got off to a positive start. ''Transaction and mortgage activity could improve spasmodically rather than rise steadily for some months. However, as long as confidence continues to strengthen, the housing market should show real improvements during 1996,'' he said. The British Bankers' Association said there had been a modestly encouraging start to the new year.

The positive signals during the past month have led most analysts to predict higher levels of activity and house prices this year, with some arguing that the recovery could turn out to be more dramatic than most people expect.

News
peopleChildren leave in tears as Santa is caught smoking and drinking
Arts and Entertainment
A host of big name acts recorded 'Do They Know It's Christmas?' in London on Saturday
musicCharity single tops chart
Arts and Entertainment
Steve Backshall has become the eighth celebrity to leave Strictly Come Dancing
tv
News
people
PROMOTED VIDEO
News
ebooksNow available in paperback
Arts and Entertainment
tvStrictly presenter returns to screens after Halloween accident
News
peopleFormer civil rights activist who was jailed for smoking crack cocaine has died aged 78
News
i100
News
Boxing promoter Kellie Maloney, formerly known as Frank Maloney, entered the 2014 Celebrity Big Brother house
people
Sport
Dwight Gayle (left) celebrates making it 1-1 with Crystal Palace captain Mile Jedinak
premier leagueReds falter to humbling defeat
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin