Uk house prices

Monday, October 1, 2007

UK property prices remain strong despite the problems in the mortgage market.

Land Registry figures released today show house prices were broadly steady in August, and calculations indicate the trend is set to continue. Despite many lenders increasing their mortgage rates following the tightening of credit markets, the housing market showed resilience.

It has been a dramatic month for the UK financial markets, and consumer confidence has undoubtedly taken a hit. But it’s important to look at the bigger picture. As the liquidity squeeze eases, short term money market rates are coming down again. This makes it easier for lenders to offer rates which are attractive for buyers.

Although borrowers have been under pressure from rising rates, as the LIBOR rate falls the banks are beginning to offer lower variable rates again. There are also many attractive fixed rates still available for homebuyers.

Confidence in the property market is stable. Predictions that house prices will remain on a level, even increasing slightly month on month, reflects continued demand for property.

While the rate of growth has dropped dramatically in response to earlier base rate rises this year, the sustained resilience of the residential property market should be encouraging for everyone.