News from the Residential Property Investor, the bi-monthly magazine for RLA members other artilces from the December 03 / January 04 issue RPI news archive

House prices defy interest rate rise - December 2003 / January 2004

A rise in Bank Base Rate has failed to dent housing market confidence.

November figures from Nationwide show house prices up 1.2 per cent on the month. On this basis the mortgage provider forecasts house prices will increase by 9 per cent in the next 12 months.

Hometrack's November National Demand Index suggested a monthly average price rise of 0.4 per cent, with an increase of 3.3 per cent in the number of sales agreed. Sellers are now achieving an average 95.2 per cent of asking price ­ up from 95.1 per cent in October.

'We predict a 4 per cent increase in prices for 2004. There's more chance of finding Elvis on the moon that there is of a house price crash next year', said Hometrack housing economist John Wriglesworth.

The County Homesearch Company also said there would be no house price crash in 2004 and predicted rises of between 5 per cent and 6 per cent next year. 'Buy to let purchases are likely to decline and this will ease the competition for first time buyers to fuel the market further', it said. 'We predict hot spots to be Lincolnshire and ruiral South Wales where bargains are still to be had'.

Meanwhile the National Association of Estate Agents said house buyers had started to put their plans on hold last month in the build-up to Christmas.

• House prices moved up by an average 10.9 per cent for the year to September, according to the Government's latest House Price Index. This was down from 14.0 per cent recorded in August, the fall attributed to a small drop in house prices between August and September this year, compared with a 2.4 per cent rise last year.
• SmartNewHomes.com said the average price buyers of new homes are willing to pay had gone up 9 per cent on the year (to £216,000) and 4 per cent in the last three months.

other artilces from the December 2003 / January 2004 issue

• Most in need will pay price of Bill
• Limited licensing promise precedes Queen's Speech
• In brief
• House prices defy interest rate rise
• Landlords' views sought
• Fitting questions may land sellers in trouble
• New powers to trim 'hedges from hell'
• Buy to let buying shows sharp rise
• How to choose between a fixed, discounted or tracker rate