Despite nay sayers claiming the recent housing recovery is nothing but a mirage caused by lack of the right stock, more reports are coming out with good news.

The House Prices and Affordability Index from FindaProperty.com shows national UK asking prices moving into positive annual growth for the first time this year, with prices currently £512 higher than a year ago.

And, what’s more, they say with confidence, this is a result of six consecutive months of stable, or positive monthly house price growth, as buyers take advantage of good value in the market with renewed confidence.

Report headlines focus on the fact national asking prices are higher than they were a year ago (£218,134 compared to £217,622 a year ago); there has been six consecutive months of stable, or rising prices, which suggest a consistent and solid recovery in the UK housing market; and, houses and larger properties are supporting this recovery, while flats and entry level properties are still showing annual price falls, creating opportunities for first time buyers.

The report highlights the fact that the recovery is being spearheaded by estate agents listing houses and properties at the upper end of the market, while flats and first time buyer homes continue to record annual falls.

Also, it shows that those properties with three, four, or five bedrooms and suitable for existing homeowners moving up the ladder, are 6.61% higher than a year ago, while entry level properties (studios, one and two-bedroom homes) are 4.6% lower. The reason for this is believed to be that that many existing homeowners still have substantial equity in their properties, so are able to access the mortgage market fairly easily despite tighter lending criteria.

The report also concluded that first time buyers have also been hardest hit by the poor employment market, reducing demand for entry level homes and therefore impacting values.

Interestingly, the average value of houses on the site is currently £239,379, 1.1% higher than a year ago, while flats are 2.17% lower than a year ago at £174,318.

And falling prices at the lower end of the market have opened up an opportunity for first time buyers. They face an ‘Affordability Gap’ which is £11,148 smaller than at the start of the year. This Affordability Gap refers to the cash deposit needed to a buy a typical first time buyer home after obtaining a mortgage achievable with average first time buyer household income

And the gap has plummeted since January, but now appears to be bottoming out as UK house prices stabilise, suggesting now is the time for first time buyers to enter the market. Furthermore, they currently need to save 1.74 times their gross annual household income, compared to 2.18 times at the start of the year.

Michael O’Flynn, Director of FindaProperty.com, said:
“Movement into positive annual growth in property prices is the news homeowners have been waiting for and suggests the UK housing market is making a sustained recovery. There is no doubt that lending criteria remain an issue, but most existing homeowners are still able to access the mortgage market using the equity they have built up over the years.

“This may be the ideal time for first time buyers to enter the property market, as the affordability gap has declined drastically since the start of 2009 and now appears to be bottoming out. But while first time buyer affordability is clearly improving, they remain constrained by the income multiples offered by lenders and still need to raise very substantial deposits amounting to more than a third of the value of the property they wish to buy. The majority of those who are able to seize this buying opportunity will still be relying on the Bank of Mum and Dad to raise the money they need.”

Guest Article by Neil Camp

House prices are beginning to show tentative signs of recovery, not only in some of the recent building society reports showing small overall increases, but also according to the City of London investment markets.

The City boys are trading in residential property derivatives and these look forward to the future state of the housing market and the way these are currently being priced suggests that any further declines in the property market will be far less than originally forecast.

At the start of 2009, the signals coming from the City derivatives market was that house prices could fall a further 30% between 2009 and 2011. As the first half of the year comes to a close, the same market is predicting further drops of less than half of that expected, some 12%.

And say the experts, this sudden reversal of fortunes has been taking place in only the last few weeks, signalling a quite dramatic change in sentiment over the short to medium term future of the U.K. housing market.

It is believed that the improving signs in the City have come about because speculators have entered the derivatives market and bought property exposure at deeply discounted levels.

This trend seems to be borne out by May’s Nationwide House Price Index which went up a touch at 1.2%, although the building society was quick to point out that this did not mean that the market had bottomed out.

But also confirming the recovery trend has been anecdotal evidence from estate agents which point to a large increase in cash buyers, especially those at the top end of the market, where one agent reported that over 40% deals were done for bundles of notes.

This cash – from various sources including top-of-the-market house sales and the closure of stock market portfolios – is having to find a home somewhere and property seems a good bet.

Property experts were keeping their fingers crossed that the upward trend was set to continue over the coming months.

Guest Article by Neil Camp

A campaign by a consumer watchdog has already alerted over 130,000 householders that they were paying too much council tax and were in need of a re-band.

Council tax payers in England and Scotland are being urged to check and challenge their tax band after research showed that nearly one million people might be in the wrong band. And that if so, people could be entitled to back-dated compensation stretching back a good number of years.

The watchdog has campaigned vigorously for refunds after highlighting the fact that council bands were first established in a rush in 1991, as a way of coping with the withdrawal of the deeply unpopular poll tax. It was what has become known as ‘second gear’ valuations, councils sent out valuation officials to guess which houses were in which bands, and this was usually done via a drive-by in a car. The watchdog points out that this hurried process has never been repeated and that numerous mistakes were made.

It recommends that people question their council tax band, mainly by looking at comparative properties in their area (the information is available online) and use various online calculators to come up with the correct figure.

If re-banded, a householder could save between £100 and £200 a year, and if back-dated to when council tax was fist introduced in 1993, this could amount to thousands of pounds if the property has been in the same hands.

Many people have gathered themselves a £1,000 windfall, with one street collectively claiming back £100,000.

So, check your council tax band now.

Guest Article by Neil Camp

As repossessions rise by 50%, it’s a case of the good news and the bad.

The bad is that a total of 12,800 homes were repossessed in the first quarter of 2009.

The good news is that was not as many as feared and the total number of future repossessions is being downgraded.

The 12,800 is considerably more than the 10,500 in the final quarter of last year and compares with 8,500 homes taken back in the first quarter of last year. But original predictions of a total of 75,000 repossessions in 2009 are being scaled back.

But there’s other bad new on an otherwise slightly more optimistic picture, with news that the number of borrowers falling behind on the mortgage payments is going up as well. Some 265,100 householders are now said to be at least three months behind on their payments.

The figures further reveal that some 1,700 repossessions in the first quarter were related to buy-to-let mortgages.

The government, having taken flak for helping banks, but not assisting householders, has introduced a number of measures to ease the situation. Courts have been told to make repossession the last resort, only if all other alternatives to keep the person in the house has been exhausted. And a mortgage support scheme has been introduced whereby interest payments can be deferred.

But, charities are highlighting many sub-prime lenders who are ignoring governments calls for restraint and quickly move for repossession.

Guest Article by Neil Camp

More than most European countries, the state of the property market in the U.K. is a major indicator of the state of the nation’s finances.

And when reports in the media talk of first-time buyers coming back, and increased mortgage applications, you can almost feel the country willing it to be the signs of those long searched for green shoots of recovery.

But some of the heavyweight media are warning not to reach too much into these initial hopeful signs.

And rather than a hope that prices have actually bottomed out, the ‘recovery’ is actually down to a shortage of houses in key locations. Lucky sellers who have the right property in the right location, once again have the upper hand. Certain estate agents have reported that the number of visits to sell a house has dramatically dropped in a number of select locations.

And the caution from saying that bricks and mortar have now recovered, is highlighted by a recent report from the Royal Institution of Chartered Surveyors which states that new instructions have dropped by around 30%. Ironically, this might be causing the effect of property shortages in the sought-after locations. The Royal Institute points to the fact that sellers are still disappointed about the new level of prices and annoyed that they have to complete a home information pack (which costs them money) before they can dip their toe in the market.

Property experts still believe that the floor of the market has yet to be reached and that an overall drop of some 25% is likely to be reached.

Guest Article by Neil Camp