2.4.12 Property prices continue to rise

Latest figures from a leading property analyst shows a rise of 0.2pc in house prices during March. The ending of a 2-year stamp duty holiday for first-time buyers is believed to have increased demand and kept prices up, along with continuing low numbers of properties for sale, especially in the South. Supply and demand is still strongly affecting a volatile housing market.

2.3.12 House Prices rise

Latest Land Registry figures have revealed an increase in house prices, by an average of 1.1% during January 2012 in England and Wales. House sale prices in London rose by an average of 2.5% in January. This is thought to be due to an improved mortgage market and because many first-time buyers are keen to find a property before the exemption to stamp duty on cheaper properties ends on the 24th March. The rise suggests a return of confidence to the property market.

4.2.12 New Mortgage offers

The 95 per cent mortgage deal is becoming more widely available and lenders are offering better prices on longer-term fixed rate mortgages. This week a leading building society offered the lowest ever interest rate for a five-year fixed-rate mortgage at 3.19%

4.2.12 NewBuy scheme launches

The government's NewBuy Guarantee scheme has been launched this month. This is to help buyers who cannot raise the required high deposit in order to secure a home.

3.2.12 Buy-to-let mortgages boom

Due to the increased interest in renting properties rather than buying, many lenders have expanded their buy-to-let mortgage offers. With increased competition amongst lenders the average buy-to-let rate has dropped from 5% last year to 4.79%.

The demand for rental properies follows the strict lending criteria and large deposits that lenders now require from prospective buyers, leaving many with renting as the only option open to them. Economic uncertainty in the property market recovery has provided a welcome increase in tenants for landlords. It is likely the buy-to-let market will continue to grow in 2012 as renting demand rises.

19.1.12 House sales drop

Property sales have fallen to the lowest level for a year, according to figures from National Association of Estate Agents (NAEA). Average house sales fell from six per estate agents branches in November to five sales in December.

However, there has been an increased interest from potential homebuyers during December, which is encouraging for the house market in 2012. This is unusual during Christmas when a slowdown is expected. It is believed this is due to a lack of properties on the market, creating a higher demand.

The number of first-time buyers has steadily risen and has now reached 21 per cent of potential buyers in the housing market.

17.1.12 Inflation drops at fastest rate in three years

The UK's inflation rate has fallen to 4.2% in December, mainly due to low clothing, shoes and fuel prices. Economists suggest that this is due to the weak buying power of consumers. Retailers cut clothes and footwear prices by 2.8% in the run up to Christmas, and petrol prices dropped by 0.6%.

This means that the Bank of England's prediction that inflation will be 2% by late 2012, is now achievable, with the likelihood of inflation dropping to 3% by spring.

Figures from The Office for National Statistics showed retail price inflation, which includes mortgage costs, also dropped from 5.2% in November, to 4.8% last month.

The Housing Strategy The Guardian (opens in a new window)

BBC Property News (external link - opens in new window)