House prices rose on an annual basis in May for the first time in 13 months, going up by 0.5%, according to new figures.
Around the regions, Yorkshire and Humberside experienced a fall in prices of 2.3% while London’s prices rose 2.4%.
“It’s certainly not a consistent picture around the country," said David Newnes, director of LSL Property Services which produced the report that also shows transactions rose to 60,000 in May, "but the return of growth to the property market on an annual basis shows the market is beginning to stabilise. The rush to complete high-value transactions before 2011’s closing of the stamp duty window meant annual growth figures in the early part of this year weren’t necessarily reflecting the progress being made in the property market."
“The return of transactions to around 60,000 per month shows that the peak and trough effect of the first-time buyer stamp duty holiday seems to be stabilising and that the return of the levy for properties valued below £250,000 hasn’t produced a sustained slump in demand," added Newnes.
Meanwhile, the latest Mortgage Monitor from e.surv chartered surveyors shows home loans were down 2.5% in May to 50,525 with first time buyers the hardest hit. Loans for new buyers fell to their lowest level for 10 months and lending to borrowers with small deposits dropped for the fourth consecutive month.
“The market has stood up well to the eurozone crisis," said Richard Sexton, business development director of e.surv. "The effects have been widely felt in the form of higher rates and fewer loans, but by no means has lending fallen off a cliff. Lending levels can’t fall much lower than they already have. But the growth prospects for the mortgage market are tied inextricably to events in the eurozone. Lending won’t recover with any conviction until the turmoil eases. The fortunes of the mortgage market over the coming months will be closely linked to decisions made in Brussels, Athens and Berlin.”Reuse content