The latest findings from the Halifax House Price Index reveal that the 1.0% rise between November and December, 2009 was slightly below the average increase over the previous five months. The average house price is now £169,042.

Figures released by the Bank of England in early January 2010 showed that the monthly number of mortgage approvals rose in November to 60,518, indicating that the number of approvals has now increased steadily for the past twelve consecutive months.

Prices increased for the second successive quarter following falls in both the first two quarters of 2009. Prices in December were 1.1% higher on an annual basis, marking the first rise since March 2008. House prices have risen by 9.4% since reaching a low in April 2009.

Good News for First-Time Buyers – Mortgage Affordable

Separate research recently released by Halifax showed that the proportion of disposable earnings devoted to mortgage payments by potential new first-time buyers on national average earnings has almost halved from a peak of 50% in June 2007 to 27% in November 2009. 

The improvement in affordability has been a result of the combination of lower house prices and interest rate reductions. Nearly a quarter of local authority areas became affordable for a potential first-time buyer between 2008 and 2009, increasing the proportion of affordable areas from 16% to 39%.

RICS senior economist Oliver Gilmartin believes that a lack of supply and the increased likelihood of interest rate rises in the second half of 2010 could cause house price inflation and future problems for first-time buyers.

“Significantly, the standard variable mortgage rate will be moving off a low base (currently more than 40% below historic norms) meaning that small movements in interest rates have a bigger proportional impact on monthly payments.”

• Top Ten House Price Websites
• House Price Predictions for 2010
• Estate Agents Views on the Housing Market

House Prices – What are House Prices Going to be in 2010?

House prices increased by 1.0% in December, 2009. Prices in the final three months of 2009 were 3.5% higher than in the third quarter. This is the biggest quarterly increase since the end of 2006 (4.2%).

Prices in the final three months of 2009 were 3.5% higher than in the third quarter. This is the biggest quarterly increase since 2006 quarter 4 (4.2%).
Prices have increased by 9.4% since reaching a low in April 2009; an increase in the average price of £14,552 over this period.  This follows a decline of 23% between August 2007 and April 2009.

House prices in December were 1.1% higher on an annual basis. This is the first increase in the annual rate of change - measured by the average for the latest three months against the same period a year earlier - since March 2008. The annual rate has turned around markedly from a low of -17.7% in April.

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