Despite concerns in the mortgage market, property prices remain resilient, says estate agent Your Move...

Land Registry figures released today show house prices were broadly steady in August, and calculations by Your Move 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.

Managing Director of Your Move, David Newnes said, “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.

Attractive rates still available

There are also many attractive fixed rates still available for homebuyers – for example, you can get a 2-year fix at less than 5.5%. Confidence in the property market is stable. Our prediction 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.”

Your Move predicts exchange prices will remain relatively unchanged, reaching £183,028 in September. The prediction is based on Your Move’s past months’ agreed sales prices which will reach exchange in September.

Your Move’s figures show an increase of 0.06% month on month – still positive, but slowing quite dramatically. The year on year rate of growth is up 8.3% - in line with the overall trend in the UK property market.  

Correcting the blip

David Newnes said, “The Bank of England Credit Conditions Survey released this week indicates that banks expect lending in the prime sector to remain stable. It is reassuring to see bricks and mortar are weathering the current storm in the financial markets.”

The percentage of asking price to agreed price is at 89.3%, down from 93.5% in August. David Newnes said, “The continued volatility of this measure reflects the considerable changes we have experienced in the property sector over the past months.

“Several rate rises and the introduction of HIPs at the beginning of August saw asking prices drop. But the market is correcting this blip and this month, the drop of percentage agreed price to asking price reflects the market acceptance of HIPs and higher rates.