House prices rise in first half of 2011
Average house prices have risen by 1.8% in the first six months of the year, according to Assetz.
Assetz House Price Watch, which collates data from the five leading house price indices - Acadametrics, Nationwide, Halifax, CLG and Rightmove - shows the average UK house price has risen consistently in 2011.
The average house price stood at £198,908 in June, up 1.8% from an average of £195,425 in January.
On an annual basis though, prices are down 1.2%.
According to Assetz, the rise shows "increasing market stability".
Stuart Law, chief executive of Assetz, comments that the upward trajectory of house prices comes in spite of faltering GDP growth.
"Looking at all the house price data together, it is clear that the overall trend is one of positive growth in the last six months, with pent-up demand from people who need to move and the rapidly growing appetite of buy-to-let investors supporting price growth."
Law adds that the improving availability and competitive mortgage interest rates is also helping the housing market "reverse the finance famine".
However, he says that these "improving market conditions" could be in jeopardy if the Bank of England continues to keep interest rates low.
"It was too slow to reduce rates as we entered the recession, which led to a series of rapid rate reductions in an attempt to stimulate the economy. Its failure to raise rates now could result in a series of panicked rises in 2012 or 2013 to combat inflation, which would have a serious impact on consumer affordability and confidence," he says.
This article first appeared on our sister website, Money Observer.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
The total money value of all the finished goods and services produced in an economy in one year. It includes all consumer and government consumption, government spending and borrowing, investments and exports (minus imports) and is taken as a guide to a nation’s economic health and financial well being. However, some economists feel GDP is inaccurate because it fails to measure the changes in a nation's standard of living, unpaid labour, savings and inflationary price changes (such as housing booms and stockmarket increases).
The catch-all term applied to investors who buy properties with the sole intention of letting them to tenants rather than living in them themselves, with the proceeds from the let usually used for the repayment of the mortgage. Buy-to-let investors have to take out specialised mortgages that carry higher interest rates and require a much bigger deposit than a standard mortgage. Other expenditure can include legal fees, income tax (on the rental profits you make), capital gains tax (if you sell the property) and “void” periods when the property is unlet.