House Prices


Flat HPi conceals regional variation


National statistics paint a picture of an inactive housing market but the numbers beneath the surface tell a different story. LSL and Acadametrics explain


by Jon Round, LSL group financial services director


LSL has seen the number of mortgage applications rise significantly over March. We have also seen more than 500 new mortgage products being introduced. While the number of products does not necessarily equate to the amount of borrowing, there are positive signs of a turn in sentiment amongst lenders with more innovation and a gradual increase in the number of high loan to value products. Over the next month or two, I am hopeful that this will translate into a further increases in lending. Certainly many of the advisers in the


LSL networks have experienced a much busier start to the year than they did last year, with some carrying out more business in the first two months of this year than they did in the six months at the end of last year. Some of this is, of course, to do with


the threat that interest rates may rise and borrowers wanting to fix their payments, but a more active house buying market leading to an increase in house purchases, is also affecting the amount of people needing a mortgage. The sale


48 mortgage introducer MAY 2011


of the related insurance and protection products to enable clients to buy their new home is boosting things for advisers still more. While many people are justifiably


worried about the Government’s cuts in public sector jobs and services, there also seems to be an air of optimism and a cautious rise in confidence. It will be hard to draw a trend until


later in the summer as the extended holiday period in April is likely to cause a temporary dip in the number of transactions, but if lending terms continue to ease as we go through the next quarter of the year and the number of housing transactions continue to rise, we should all see a slightly easier and more profitable progression through the year.


Surveyor view The UK remains a mixed picture. While on the surface it looks like nothing much is happening with the average house price almost exactly the same as it was a year ago, actually it’s a bit like a duck on the river: very little action above the surface while underneath there is a flurry of activity that is not immediately visible. At the moment the activity is in the


different regions around the country. On the surface house prices aren’t going anywhere, whilst underneath there are


huge regional variations with 65 counties experiencing a drop in house prices – that’s more than half of all the 108 counties in England and Wales. The UK average house price is mainly


propped up by house price rises in the counties around Greater London and South East England but areas such as Gloucestershire and Darlington are also seeing record rises. At the other end of the scale, in the two


districts that have experienced the largest house price falls, prices fell by more than 11% on an annual basis, but there are other districts throughout England and Wales which are suffering large drops in prices and it appears that the north/south divide is getting ever wider.


eState agency view The number of housing transactions usually sees a surge in March but this year it has risen more than usual. The number of houses being bought and sold has increased by 6% over this time last year and we anticipate that, when all the figures are in the number of housing transactions will have increased by 30% in March compared to February. There seems to have been an


increase in activity in London especially, particularly in houses over £1m before the Government introduced its new 5% stamp duty band for houses over £1m on


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